Medical Device Stocks to Report Earnings on Feb. 12: BAX, WST & DXCM

As the fourth-quarter earnings season unfolds, the ongoing week represents a key reporting window for several medical-sector companies.

According to the latest Earnings Preview report, the Medical sector’s earnings likely faced pressure from a challenging macroeconomic backdrop and ongoing geopolitical uncertainties, including tariff-related concerns and persistent healthcare labor shortages. However, the top-line performance is likely to have remained resilient, supported by continued adoption of artificial intelligence (AI), robotics, and data analytics across healthcare delivery and medtech.

Looking at the sector’s broader earnings scorecard, about 40% of Medical-sector companies —accounting for 73.9% of the sector’s total market capitalization — reported results as of Feb. 4. Aggregate earnings for these companies increased 3.3% year over year, driven by 9.5% revenue growth. Notably, 75% of index constituents delivered earnings and revenue beat.

For the fourth quarter, sector earnings are projected to decline 1.5% year over year despite solid revenue growth of 9.1%. This marks a deceleration from the third quarter, when earnings rose 4.4% alongside revenue growth of 10.4%.

Major industry players like Baxter BAX, West Pharmaceutical Services WST and DexCom DXCM are set to report tomorrow.

Factors Likely to Have Influenced Medical Device Stocks' Earnings

A defining trend across the medical device industry is the rising adoption of digital health solutions. The rising demand for medical devices, such as wearable health monitors, minimally invasive surgical tools and 3D printing systems, likely supported meaningful growth during the fourth quarter, reflecting hospitals and clinicians’ push toward technology-enabled care and efficiency.

Mergers and acquisitions also appear to have been robust during the quarter, as large medical device players sought to broaden their portfolios through targeted buyout of innovative, specialized companies. According to a J.P. Morgan report, 27 medtech M&A transactions were announced in the quarter, representing $43.4 billion in upfront cash and equity consideration. Several large-cap medical device companies delivered strong revenue performance, underscoring the sector’s underlying demand strength.

Persistent structural challenges continue to weigh on operational efficiency across the medical sector. In China, volume-based procurement (VBP) policies have intensified price competition as multinational medical device products gain wider market access. Steep price cuts — often 50% to 90% below levels in other global markets — have materially pressured profitability.

Recent earnings reports highlight this impact. Thermo Fisher recorded a 10% year-over-year increase in cost of goods sold, driving a 150-basis-point decline in gross margin, while Abbott said China’s VBP would create a meaningful headwind of about $400 million in 2025. Adding to these challenges, rising cybersecurity risks remain an ongoing concern for the industry.

Medical Device Stocks to Watch

Baxter: The company’s upcoming quarterly results are likely to reflect a business still navigating near-term operational headwinds, even as pockets of resilience and strategic recalibration begin to take shape. While management has emphasized the company’s long-term potential, recent commentary suggests that execution challenges — particularly in infusion therapies and select pharmaceutical categories — might have continued to weigh on its quarterly performance.

(Read more: Baxter to Post Q4 Earnings: What's in Store for the Stock?)

The Zacks Consensus Estimate for revenues is pegged at $2.79 billion, indicating an increase of 1.5% from the year-ago reported figure. The Zacks Consensus Estimate for EPS suggests an 8.6% decline to 5 cents.

During the fourth quarter, BAX’s shares fell 16.1% compared with the industry’s 7.9% decline.

Per our proven model, a stock with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates. This is not the case here, as you can see below. You can see the complete list of today’s Zacks #1 Rank stocks here.

BAX has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Baxter International Inc. Price and EPS Surprise

Baxter International Inc. price-eps-surprise | Baxter International Inc. Quote

West Pharmaceutical: Sales in the fourth quarter are likely to have been driven by continued demand for West Pharmaceutical’s high-value product (HVP) portfolio. The higher margin in the HVP components is likely to have benefited gross margin. The company’s Contract Manufacturing segment sales should have benefited during the fourth quarter on the back of continued demand for self-injected devices for obesity and diabetes. A potential improvement in pricing should have benefited sales further.

(Read more: WST Q4 Earnings Preview: Can HVP Momentum Continue to Drive Margins?)

The Zacks Consensus Estimate for revenues is pegged at $794.3 million, suggesting a 6.1% rise from the year-ago reported figure. The Zacks Consensus Estimate for earnings is pinned at $1.83 per share, indicating a 0.6% rise from the year-ago reported number.

During the fourth quarter, the stock gained 4.8% compared with the industry’s 10.1% growth.

WST has an Earnings ESP of -0.78% and a Zacks Rank #2.

West Pharmaceutical Services, Inc. Price and EPS Surprise

West Pharmaceutical Services, Inc. price-eps-surprise | West Pharmaceutical Services, Inc. Quote

DexCom: Its fourth-quarter performance likely reflected a rebound in U.S. new customer starts as G7 deployment issues eased, alongside modest gross-margin improvement from lower scrap rates and freight costs. International growth and expanding type 2 diabetes adoption remained key demand drivers. Investors are expected to focus on exit-rate trends and underlying user growth to gauge momentum heading into 2026.

(Read more: Will DXCM Deliver Q4 Earnings Beat on G7 Stabilization, Volume Growth?)

The Zacks Consensus Estimate for revenues is pegged at $1.25 billion, suggesting 12.4% growth from the year-ago reported figure. The Zacks Consensus Estimate for earnings is pinned at 65 cents per share, indicating a 44.4% rise from the year-ago reported number.

During the fourth quarter, the stock fell 1.4% against the industry’s 15.1% growth.

DXCM has an Earnings ESP of +3.08% and a Zacks Rank #3.

DexCom, Inc. Price and EPS Surprise

DexCom, Inc. price-eps-surprise | DexCom, Inc. Quote

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research