2 Healthcare Stocks with Competitive Advantages and 1 to Keep Off Your Radar

Healthcare companies are pushing the status quo by innovating in areas like drug development and digital health. But speed bumps such as inventory destockings have persisted in the wake of COVID-19, and over the past six months, the industry has pulled back by 6.6%. This drop was disheartening since the S&P 500 held its ground.

The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. Keeping that in mind, here are two healthcare stocks boasting durable advantages and one best left ignored.

One HealthcareStock to Sell:

U.S. Physical Therapy (USPH)

Market Cap: $1.19 billion

With a nationwide footprint spanning 671 clinics across 42 states, U.S. Physical Therapy (NYSE:USPH) operates a network of outpatient physical therapy clinics and provides industrial injury prevention services to employers across the United States.

Why Are We Wary of USPH?

1. Modest revenue base of $699.5 million gives it less fixed cost leverage and fewer distribution channels than larger companies
2. Performance over the past five years shows its incremental sales were less profitable as its earnings per share were flat
3. Free cash flow margin shrank by 14.4 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive

U.S. Physical Therapy’s stock price of $78.43 implies a valuation ratio of 29.1x forward P/E. If you’re considering USPH for your portfolio, see our FREE research report to learn more.

Two Healthcare Stocks to Watch:

Astrana Health (ASTH)

Market Cap: $1.25 billion

Formerly known as Apollo Medical Holdings until early 2024, Astrana Health (NASDAQ:ASTH) operates a technology-powered healthcare platform that enables physicians to deliver coordinated care while successfully participating in value-based payment models.

Why Are We Positive On ASTH?

1. Annual revenue growth of 35.9% over the past two years was outstanding, reflecting market share gains this cycle
2. Notable projected revenue growth of 19.6% for the next 12 months hints at market share gains
3. Earnings per share grew by 25% annually over the last five years and trumped its peers

Astrana Health is trading at $24.59 per share, or 6.2x forward EV-to-EBITDA. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.

BrightSpring Health Services (BTSG)

Market Cap: $3.97 billion

Founded in 1974, BrightSpring Health Services (NASDAQ:BTSG) offers home health care, hospice, neuro-rehabilitation, and pharmacy services.

Why Does BTSG Catch Our Eye?

1. Annual revenue growth of 20.9% over the past two years was outstanding, reflecting market share gains this cycle
2. Sales outlook for the upcoming 12 months implies the business will stay on its desirable two-year growth trajectory
3. Annual earnings per share growth of 6.9% over the last three years modestly outpaced its peers

At $22.02 per share, BrightSpring Health Services trades at 35.4x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

Stocks We Like Even More

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today