A Look Back at Medical Devices & Supplies - Cardiology, Neurology, Vascular Stocks' Q2 Earnings: Merit Medical Systems (NASDAQ:MMSI) Vs The Rest Of The Pack

As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the medical devices & supplies - cardiology, neurology, vascular industry, including Merit Medical Systems (NASDAQ:MMSI) and its peers.

The medical devices and supplies industry, particularly in the fields of cardiology, neurology, and vascular care, benefits from a business model that balances innovation with relatively predictable revenue streams. These companies focus on developing life-saving devices such as stents, pacemakers, neurostimulation implants, and vascular access tools, which address critical and often chronic conditions. The recurring need for these devices, coupled with growing global demand for advanced treatments, provides stability and opportunities for long-term growth. However, the industry faces hurdles such as high research and development costs, rigorous regulatory approval processes, and reliance on reimbursement from healthcare systems, which can exert downward pressure on pricing. Looking ahead, the industry is positioned to benefit from tailwinds such as aging populations (which tend to have higher rates of disease) and technological advancements like minimally invasive procedures and connected devices that improve patient monitoring and outcomes. Innovations in robotic-assisted surgery and AI-driven diagnostics are also expected to accelerate adoption and expand treatment capabilities. However, potential headwinds include pricing pressures stemming from value-based care models and continued complexity changing from navigating regulatory frameworks that may prioritize further lowering healthcare costs.

The 4 medical devices & supplies - cardiology, neurology, vascular stocks we track reported an exceptional Q2. As a group, revenues beat analysts’ consensus estimates by 3%.

Thankfully, share prices of the companies have been resilient as they are up 6.5% on average since the latest earnings results.

Merit Medical Systems (NASDAQ:MMSI)

Founded in 1987 and now offering over 1,700 patented products across global markets, Merit Medical Systems (NASDAQ:MMSI) manufactures and markets specialized medical devices used in minimally invasive procedures for cardiology, radiology, oncology, critical care, and endoscopy.

Merit Medical Systems reported revenues of $382.5 million, up 13.2% year on year. This print exceeded analysts’ expectations by 2.4%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ full-year EPS guidance estimates and a beat of analysts’ EPS estimates.

“We delivered better-than-expected financial performance in the second quarter, with our top-and-bottom line results exceeding the high-end of our forecast,” said Fred P. Lampropoulos, Merit’s Chairman and Chief Executive Officer.

Merit Medical Systems scored the highest full-year guidance raise of the whole group. The results were likely priced in, however, and the stock is flat since reporting. It currently trades at $82.35.

Is now the time to buy Merit Medical Systems? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q2: Artivion (NYSE:AORT)

Formerly known as CryoLife until its 2022 rebranding, Artivion (NYSE:AORT) develops and manufactures medical devices and preserves human tissues used in cardiac and vascular surgical procedures for patients with aortic disease.

Artivion reported revenues of $113 million, up 15.3% year on year, outperforming analysts’ expectations by 4.4%. The business had an exceptional quarter with a beat of analysts’ EPS estimates and full-year revenue guidance exceeding analysts’ expectations.

Artivion delivered the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 23.8% since reporting. It currently trades at $40.47.

Is now the time to buy Artivion? Access our full analysis of the earnings results here, it’s free for active Edge members.

Penumbra (NYSE:PEN)

Founded in 2004 to address challenging medical conditions with significant unmet needs, Penumbra (NYSE:PEN) develops and manufactures innovative medical devices for treating vascular diseases and providing immersive healthcare rehabilitation solutions.

Penumbra reported revenues of $339.5 million, up 13.4% year on year, exceeding analysts’ expectations by 3.7%. It may have had the worst quarter among its peers, but its results were still good as it also locked in an impressive beat of analysts’ constant currency revenue estimates and a solid beat of analysts’ revenue estimates.

Penumbra delivered the weakest full-year guidance update in the group. Interestingly, the stock is up 9.6% since the results and currently trades at $249.04.

Read our full analysis of Penumbra’s results here.

ICU Medical (NASDAQ:ICUI)

Founded in 1984 and named for its initial focus on intensive care units, ICU Medical (NASDAQ:ICUI) develops and manufactures medical products for infusion therapy, vascular access, and vital care applications used in hospitals and other healthcare settings.

ICU Medical reported revenues of $548.9 million, down 8% year on year. This result surpassed analysts’ expectations by 1.7%. Overall, it was an exceptional quarter as it also produced a beat of analysts’ EPS estimates and an impressive beat of analysts’ full-year EPS guidance estimates.

ICU Medical had the weakest performance against analyst estimates and slowest revenue growth among its peers. The stock is down 6.8% since reporting and currently trades at $121.33.

Read our full, actionable report on ICU Medical here, it’s free for active Edge members.

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

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