4 Medical Product Stocks to Watch From a Challenging Industry

The Zacks Medical - Products industry is grappling with a difficult operating landscape marked by tariff-driven cost inflation, persistent supply-chain delays, and uneven macroeconomic conditions that are pressuring margins and tempering near-term outlooks. Companies continue to face regulatory and reimbursement uncertainty, intensifying competitive threats, and pricing pressure across commoditized segments. Integration risks tied to ongoing acquisitions further complicate execution at a time when operational precision is critical.

Yet, despite these obstacles, firms are mitigating headwinds through aggressive cost discipline, supply-chain optimization and tighter inventory control. Strengthening balance sheets and robust cash generation are enabling continued investment in innovation, which is driving mid to high-single-digit — and in some cases double-digit — organic growth across cardiovascular, diabetes, imaging and infusion categories. Improving order books and portfolio expansion through targeted acquisitions are also bolstering long-term resilience.

Boston Scientific BSX, Insulet PODD, BioLife Solutions BLFS and Allurion Technologies ALUR are countering industry pressures through differentiated innovation pipelines, operational efficiencies and focused execution in their respective growth franchises.

Industry Description

The industry includes companies that provide medical products and cutting-edge technologies for healthcare services. These companies are primarily focused on research and development and cater to vital therapeutic areas like cardiovascular, nephrology and urology devices.

The increase in procedure volumes is driving sales, particularly for surgical products and services. At the same time, cost-cutting measures are helping companies improve their bottom-line performance.

However, the industry’s profitability picture is under significant strain. Tariff-related expenses are cutting into margins, forcing companies into complex and costly supply-chain restructuring. Persistent component shortages, though less widespread than in prior years, continue to create inefficiencies and constrain output in certain product lines.

Major Trends Shaping the Future of the Medical Products Industry

AI and Digital Health Integration: AI has rapidly transitioned from narrow diagnostic augmentation to broad, workflow-integrated solutions. With more than 950 FDA-cleared AI/ML-enabled devices and remote patient monitoring platforms projected to reach $57 billion by 2030 per a Markets and Markets report, digital health is driving margin expansion, recurring revenue models and ecosystem consolidation. These technologies enable earlier intervention, support value-based care, and fundamentally shift profit pools from hardware to data-driven services, reflecting a deep convergence of clinical and software innovation.

Migration to Ambulatory and Home-Based Care: The U.S. market is experiencing a sustained shift from inpatient hospital settings to ambulatory surgical centers (ASCs) and home-based monitoring. ASC market is set to reach $205 billion by 2030, per a Grand View Research report, driven by procedure cost efficiency, CMS policy changes and expanded device portfolios tailored for outpatient use. Coupled with increased adoption of wearables and connected devices, care decentralization is reshaping technology requirements, pricing structures, and competitive dynamics for device makers.

Accelerating Innovation in Robotics and Specialty Therapeutics: Surgical robotics and specialty cardiovascular interventions are driving the next wave of value creation, with robotics poised for 10.5% CAGR, per a Grand View Research report, and pulsed-field ablation transforming electrophysiology standards.

Intuitive Surgical’s platform evolution, entry of versatile competitors and expansion of structural heart solutions (TMVR, PFA) highlight a winner-take-most dynamic — innovation, outcomes evidence, and ecosystem lock-in are creating durable profit and ROIC advantages, while commoditized hardware businesses are under pressure.

Regulatory and Value-Based Care Transformation: The regulatory environment is evolving, with initiatives like the TCET pathway and bundled payment models rapidly aligning reimbursement and approval processes with evidence-based, value-centric purchasing.This results in faster market access for breakthrough devices and increased pricing pressure on mature categories. Success depends on manufacturers’ ability to demonstrate clinical differentiation, deliver outcome gains, and participate in risk-sharing arrangements — those that fail to adapt will face margin compression and potential disintermediation.

Zacks Industry Rank

The Zacks Medical Products industry falls within the broader Zacks Medical sector.

It currently carries a Zacks Industry Rank #160, which places it in the bottom 34% of more than 240 Zacks industries.

The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all member stocks, indicates bright near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Before we present a few medical product stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.

Industry Performance

The industry has underperformed its own sector as well as the Zacks S&P 500 composite over the past year.

Stocks in this industry have collectively declined 1.8% against the Zacks Medical sector’s rise of 0.5%. The S&P 500 has increased 16.4% in the same time frame.

One-Year Price Performance

Industry's Current Valuation

On the basis of the forward 12-month price-to-earnings (P/E), which is commonly used for valuing medical stocks, the industry is currently trading at 20.4X compared with the S&P 500’s 23.3X and the sector’s 20.6X.

Over the past five years, the industry has traded as high as 27.4X and as low as 17.8X, with the median being at 22X, as the charts show.

Price-to-Earnings Forward Twelve Months (F12M)

Price-to-Earnings Forward Twelve Months (F12M)

4 Promising Medical Product Stocks

BioLife Solutions is emerging as a focused, higher-margin cell-processing pure play following a successful two-year strategic transformation. The third-quarter transcript highlights a compelling investment case driven by robust demand recovery in biopreservation media, reflected in 33% Y/Y cell-processing growth and expanding EBITDA margins as operating leverage improves. The divestiture of the evo Cold Chain business has sharpened BLFS’ portfolio while strengthening liquidity, giving the company more than $125 million in cash to support disciplined M&A and product???line expansion.

Operational efficiency gains, seen in streamlined operations, rising direct-sales mix, and improved visibility from deep penetration into late-stage CGT programs, position BLFS for sustained recurring revenue growth. With BPM products embedded in 16 approved therapies and 30+ Phase III trials, the company enjoys exceptional demand durability. Management’s cross-sell strategy across CryoCase, CellSeal, HPL and CT5 offers meaningful revenue-per-patient upside. Overall, BLFS appears well-placed to benefit from expanding cell-therapy adoption, stronger commercial pipelines and strategic reinvestment capacity.

For this Bothell, WA-based company, the Zacks Consensus Estimate for 2025 revenues indicates a year-over-year decline of 15.7%. The consensus estimate for earnings indicates growth of 200.00%. It delivered a trailing four-quarter earnings surprise of 229.17%, on average. Presently, the company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Price and Consensus: BLFS

Boston Scientific enters 2026 with a powerful investment backdrop, anchored by broad-based demand strength, operational momentum and strategic expansion across high-growth cardiovascular and MedSurg segments. The third-quarter transcript underscores exceptional organic growth of 15%, driven by outperformance in Electrophysiology— led by FARAPULSE — and WATCHMAN, both benefiting from accelerating adoption, expanding indications and rising global utilization.

Operational efficiency remains a clear tailwind, with mix-driven gross-margin improvement, strong drop-through and disciplined cost management supporting 100 bps full-year operating-margin expansion despite a $100M tariff headwind. Strategic M&A is further strengthening BSX’s long-term profile — the Elutia BioEnvelope acquisition enhances the CRM ecosystem, while the planned Nalu Medical acquisition expands neuromodulation into high-growth peripheral nerve stimulation.

With new product catalysts, including AGENT DCB, FARAPOINT, OPAL HDx integration and WATCHMAN Elite, alongside strong China momentum and easing ERP-related backorders, BSX is well positioned to deliver sustained double-digit organic growth, expanding margins and robust cash generation through 2026 and beyond.

For this Natick, MA-based company, the Zacks Consensus Estimate for 2025 revenues is pegged at $20.06 billion. The consensus mark for EPS is pinned at $3.04 per share, implying a 21.1% improvement year over year. The company delivered a trailing four-quarter average earnings surprise of 7.36%. Presently, the company carries a Zacks Rank #2 (Buy).

Price and Consensus: BSX

Insulet enters 2026 with a highly compelling investment setup, supported by powerful demand momentum, expanding global adoption and disciplined operational scaling. The third quarter showed 28% constant-currency growth, record new customer starts across U.S. Type 1, Type 2 and international markets, and nearly 300 bps of gross-margin expansion — evidence of strong recurring revenues, manufacturing productivity and favorable mix shifts driven by rapid Omnipod 5 uptake.

The company’s strategic priorities — accelerating innovation, expanding pharmacy-based access, driving demand through DTC, and scaling global operations — are translating into durable growth. Type 2 diabetes is becoming a major growth engine, with new customer starts doubling year over year and prescriber adoption expanding rapidly. Meanwhile, international revenues surged 40% at constant currency as Omnipod 5 conversions and new launches broaden the installed base.

Manufacturing expansion in Acton and Malaysia, increasing smartphone control adoption and upcoming sensor integrations (G7, Libre 3) further strengthen PODD’s multiyear runway. With improving retention, strong cash generation and a robust pipeline including next-generation closed-loop systems, Insulet is well positioned for sustained top-tier growth and margin expansion.

For this Acton, MA-based company, the Zacks Consensus Estimate for 2025 revenues is pegged at $2.69 billion. The consensus mark for EPS is pinned at $4.89 per share, implying a 50.9% improvement year over year. The company delivered a trailing four-quarter average earnings surprise of 17.75%. Presently, the company carries a Zacks Rank #2.

Price and Consensus: PODD

Allurion is positioning itself for a meaningful turnaround as it advances toward FDA approval and refines its commercial model around metabolically focused obesity clinics. The company delivered sequential operational improvement in the third quarter, with operating losses narrowing sharply following restructuring actions that cut adjusted operating expenses by 42% year over year.

Management’s strategic pivot, targeting clinics that combine GLP-1 therapy with Allurion’s balloon program, is already yielding stronger patient flow, supported by high GLP-1 discontinuation rates that create a steady funnel of candidates seeking alternatives. Meanwhile, the company is strengthening its balance sheet with a debt-for-equity exchange and private placement, giving it financial flexibility ahead of a potential U.S. launch.

Longer-term catalysts include next-generation innovation — development of a drug-eluting balloon with its strategic partner, expanded manufacturing capacity and a longer-lasting intragastric device — positioning the Smart Capsule as a scalable drug-delivery platform. With regulatory milestones progressing smoothly and sequential growth expected into 2026, Allurion appears well placed to benefit from resurgent demand and a more disciplined, efficient operating structure.

For this Natick, MA-based company, the Zacks Consensus Estimate for 2025 loss is pinned at $4.99 per share, implying 45.8% improvement year over year. The company delivered a trailing four-quarter average earnings surprise of 33.47%. Presently, the company carries a Zacks Rank of 2.

Price and Consensus: ALUR

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This article originally published on Zacks Investment Research (zacks.com).

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