Here's Why You Should Hold the GEHC Stock in Your Portfolio for Now

GE HealthCare Technologies, Inc. GEHC is well-poised for growth in the coming quarters, courtesy of its continued focus on innovations. The optimism, led by strong fourth-quarter 2024 performance and acquisitions, is expected to contribute further. However, geopolitical tensions and stiff competition are concerning.

This Zacks Rank #3 (Hold) company’s shares have lost 11.6% in the year-to-date period against 2.7% growth of the industry. The S&P 500 Composite has lost 7.1% during the said time frame.

The renowned provider of medical technology, pharmaceutical diagnostics and digital solutions has a market capitalization of $29.71 billion. The company projects 6.2% growth for the next five years and expects to maintain its strong performance going forward. It delivered a trailing four-quarter average earnings surprise of 6.17%.

Factors Favoring GEHC’s Growth

Innovations Supporting Growth: GE HealthCare’s commitment to drive innovation has allowed it to achieve continuous, significant improvements. Recently, the company announced the launch of Invenia  Automated Breast Ultrasound Premium, the latest 3D ultrasound offering advanced artificial intelligence (AI) and innovative features to drive faster, reproducible supplemental screening and streamline exam readings on patients with dense breasts.

Earlier this month, GEHC announced the launch of the AltiX AI.i edition of Mac-Lab, CardioLab and ComboLab. The AltiX AI.i edition is expected to enhance efficiency and precision care for multiple types of cardiac procedures. The latest launch is expected to significantly strengthen GE HealthCare’s CardioVascular & Interventional Solutions unit, thus boosting its Advanced Visualization Solutions business.

Also, GEHC unveiled the Genesis portfolio, a portfolio of cloud enterprise imaging software-as-a-service solutions designed to modernize healthcare data management. Genesis is likely to offer scalable, secure and interoperable solutions that help hospitals and health systems streamline workflows, enhance patient data access and reduce operational costs.

Last month, GEHC unveiled Freelium, a next-generation sealed magnet platform at ECR 2025, designed to revolutionize MR imaging. The platform uses less than 1% of helium compared with traditional systems, promoting sustainability and expanding access to quality imaging in helium-scarce regions.

In January, it announced receiving FDA 510(k) clearance for updated Voluson Expert Series ultrasound systems. This advanced portfolio, which includes the Voluson Expert 22, 20 and 18, sets a new benchmark in women’s healthcare by combining exceptional image quality, cutting-edge ultrasound technology and ergonomic design to enhance workflow efficiency and deliver an unparalleled user experience.

Acquisitions & Partnerships: GE HealthCare has several partnership agreements that help attract long-term customers for its products and services. GEHC is also focused on acquiring companies that will help it grow.

Recently, GEHC announced an expansion of its collaboration with NVIDIA Corporation to advance AI-driven autonomous solutions, which were designed to ease the growing burden on healthcare professionals.GE HealthCare aims to develop AI-enabled X-ray and ultrasound systems by leveraging the new NVIDIA Isaac for Healthcare platform, built on NVDA’s three computers utilized to create physical AI. This includes NVIDIA Omniverse for robotic simulation workflows.

In January, GE HealthCare launched two strategic collaborations to advance medical imaging and care delivery. Partnering with the University of California, San Francisco, they established a Care Innovation Hub focused on improving access to advanced imaging, non-invasive diagnosis of neurological and neurodegenerative diseases, and precision oncology. Simultaneously, GEHC entered a seven-year Care Alliance with Sutter Health to enhance access to innovative imaging services and streamline care coordination across the Sutter Health system.

Strong Q4 Results: GE HealthCare exited fourth-quarter 2024 with decent results, wherein earnings and revenues improved year over year. Total company orders increased 6% organically year over year. Revenues were driven by strength in the U.S. market across all segments, especially in the Advanced Visualization Solutions and Pharmaceutical Diagnostics segments.

GEHC’s net income margin was 13.5%, up 580 basis points from the prior-year period due to productivity and pricing benefits.

A Factor That May Offset the Gains for GEHC

Rising Tariffs to Hurt Business Growth: GE HealthCare faces potential challenges in 2025 due to new U.S. tariffs on Chinese imports, which will affect its cost structure and profitability. The company expects a 10-basis-point hit to the adjusted EBIT margin, factoring in 11 months of tariff costs. Higher material costs, especially for imaging equipment and electronic components, along with possible supply-chain disruptions, pose risks. While lean manufacturing and supplier partnerships may cushion some impact, prolonged tariffs could pressure margins and pricing.

Estimate Trend of GEHC

GEHC is witnessing a stable estimate revision trend for fiscal 2025. In the past 60 days, the Zacks Consensus Estimate for earnings has been stable at $4.70 per share.

The Zacks Consensus Estimate for first-quarter fiscal 2025 revenues is pegged at $4.66 billion, indicating a 0.2% improvement from the year-ago quarter’s reported number. The consensus mark for EPS is pinned at $0.91, implying an improvement of 1.1% year over year.

Stocks to Consider

Some better-ranked stocks from the same medical industry are Fresenius Medical Care FMS, Masimo MASI and Glaukos GKOS.

Fresenius Medical, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated growth rate of 28.9% for 2025. You can see the complete list of today’s Zacks #1 Rank stocks here.

FMS’ earnings beat estimates in three of the trailing four quarters and met in one, delivering an average surprise of 15.67%. The company is expected to release first-quarter results next month.

FMS’ shares have gained 6% so far this year.

Masimo, sporting a Zacks Rank of 1 at present, has an estimated growth rate of 20% for 2025.

MASI’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 14.41%. Its shares have risen 58.5% compared with the industry’s 3.9% growth year to date. The company is expected to release first-quarter results in May.

MASI’s shares have lost 8% so far this year.

Glaukos, carrying a Zacks Rank #2 (Buy) at present, has an estimated earnings growth rate of 48.9% for 2025. It delivered a trailing four-quarter average earnings surprise of 8.11%. The company’s earnings beat estimates in two of the trailing four quarters, met in one and missed in the other, delivering an average surprise of 8.11%. The company is expected to release first-quarter results on April 30.

GKOS’ shares have plunged 40.1% so far this year.

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

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