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The Rise of Robotics in Healthcare: 7 Stocks Poised for Growth

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The evolution of robotic surgery continues to shape the healthcare landscape, offering a multitude of benefits such as minimal invasiveness, faster recovery times, and superior clinical outcomes. The industry is on an upward trajectory, with a projected market value surge from $3.3 billion in 2023 to $7.2 billion by 2033, showcasing a robust 15.7% compound annual growth rate.

Investing in robotic surgery stocks may not be the conventional choice, but it presents a promising opportunity for those willing to navigate uncharted waters. The current underutilization of robotic systems in surgery implies a vast potential for early investors to capitalize on.

While obstacles like high costs and limited training hinder market penetration, the field of robotic surgery is spearheading the future of healthcare. As system costs decline and operational efficiencies improve, the industry is primed for considerable expansion.

Here are seven standout robotic surgery stocks for investors eyeing the healthcare sector this year.

Intuitive Surgical (ISRG)

A sign with the Intuitive Surgical logo standing outside of a company office. ISRG stock.

Intuitive Surgical (NASDAQ:ISRG) boasts a stellar track record with its da Vinci surgical systems, a ubiquitous presence in various medical procedures worldwide.

The fourth quarter of 2023 heralded a remarkable performance for ISRG, showcasing a 21% surge in da Vinci procedures and a 14% uptick in the installed base of systems, reaching 8,606 units. Annual figures revealed a noteworthy 9% rise in average system utilization, with Q4 revenue posting a substantial 17% increase to $1.93 billion. Notably, leasing constituted 48% of Q4 placements.

Looking ahead to 2024, ISRG anticipates a surge of 13% to 16% in procedures compared to the previous year, underpinned by a notable 25% escalation in U.S. general surgery procedures.

Despite trading at a premium relative to its peers, the market sentiment remains bullish towards ISRG, evident from its forward P/E ratio of 61 times earnings and analysts rating the stock as a β€œBuy.” As the foremost brand in global robotic surgeries, ISRG’s leadership position is poised to endure.

Stryker (SYK)

The Stryker (SYK) office in Fremont, California.

Stryker (NYSE:SYK) is renowned for its Mako robotic arm, revolutionizing joint replacement surgeries with unparalleled precision.

The Mako system leverages a robotic arm to aid surgeons during knee and hip replacements, leveraging patient-specific CT scan data to craft a 3D model and strategize the surgery meticulously.

Fiscal year 2023 witnessed Stryker forecasting a robust 10.5% organic revenue growth, sustaining a projected 10% growth trajectory into 2024.

In Q4 2023, Stryker reported surpassing financial results, boasting an adjusted earnings per share (EPS) of $3.46, outpacing the expected $3.27, alongside a revenue of $5.82 billion, exceeding projections of $5.60 billion.

With estimates indicating organic net sales growth between 7.5% and 9.0% for 2024, with an adjusted EPS range of $11.70 to $12, Stryker emerges as a formidable contender for investors eyeing the robotic surgery sector.

Becton, Dickinson and Company (BDX)

The front of a Becton Dickinson (BDX) office in Ontario, Canada.

Becton, Dickinson and Company (NYSE:BDX) specializes in cutting-edge medical devices and instrument systems.

One of BDX’s standout offerings is the Auriga Robotic Endovascular System, a technology blend encompassing robotics, advanced imaging, and precise instrumentation for optimal vascular interventions.

The current environment presents a ripe opportunity for investors to consider BDX stock, with the company revising its full-year adjusted EPS guidance upwards, setting the stage for robust fiscal year 2024 revenues.

An Insightful Look at the Future of Medical Robotics Stocks

Amidst the evolving landscape of medical technology, BDX has revised its revenue forecast to a range of about $20.2 billion to $20.4 billion for the fiscal year. This adjustment marks a notable increase from the previous estimated range of $20.1 billion to $20.3 billion, reflecting growing confidence in the company’s financial outlook. Additionally, BDX anticipates its adjusted diluted EPS for fiscal year 2024 to fall within the $12.82 to $13.06 range, up from the prior projection of $12.70 to $13.00.

Embracing Change: Zimmer Biomet Holdings (ZBH)

Modern Medical Research Laboratory with Computer, Microscope, Glassware with Biochemicals on the Desk. Scientific Lab Biotechnology Development Center Full of High-Tech Equipment. Biomedical technology stocks, RSLS Stock

Source: Gorodenkoff / Shutterstock.com

Zimmer Biomet Holdings (NYSE:ZBH) stands at the frontier of medical technology advancements with its cutting-edge ROSA robotics platform, tailored for total knee replacement procedures. The company has embarked on a restructuring initiative aimed at cost reduction, projecting approximately $200 million in savings by 2025. Furthermore, ZBH foresees its full-year 2024 profits to range from $8 to $8.15 per share, surpassing consensus estimates of $7.95 and expects revenue to grow by 5% to 6% on a constant currency basis.

With a forward P/E ratio of merely 15 times earnings, ZBH presents itself as an alluring investment opportunity within the robotics sector. Although analysts have maintained a β€œHold” rating, the ongoing restructuring at ZBH has sparked caution among investors, creating a potential disparity between the company’s intrinsic value and its current stock price.

Pioneering Progress: Smith & Nephew (SNN)

Smith & Nephew plc (ADR) (SNN)

Source: Shutterstock

Smith & Nephew (NYSE:SNN) specializes in orthopedic reconstruction and sports medicine. Collaborating with Brainlab, Smith & Nephew has introduced the ROBOTICS KNEE platform for total knee replacement procedures, featuring robotic control during bone cutting, integrated navigation software, and patient-specific 3D planning.

Smith & Nephew anticipates a 5% to 6% underlying revenue growth and aims for a trading profit margin of at least 18%. With a modest market cap of $12 billion, SNN offers potential for growth, especially as analysts project a significant 71.22% increase in EPS this year, edging its stock price higher.

Innovative Solutions: Globus Medical (GMED)

Doctor or physician calculating a patients medical bills at a desk. Medical bills, health costs, health expenses.

Source: THICHA SATAPITANON / Shutterstock

Globus Medical (NYSE:GMED) has been spearheading innovation in musculoskeletal solutions, featuring the ExcelsiusGPS robotic navigation platform for spine procedures. This platform offers precision in guidance for pedicle screw placement, enhancing the effectiveness of spine surgeries such as fusions and decompressions.

GMED recently achieved remarkable financial milestones, reporting record net sales of $616.5 million in Q4 and $1.568 billion for the full year in 2023. Bolstered by its merger with NuVasive and increased product volumes, GMED’s non-GAAP net income surged by 38.9%, reaffirming the company’s robust revenue outlook for 2024.

Revolutionizing Healthcare: A Glimpse into the Financial Growth of Two Medical Giants

GMED: A Glimmer of Hope in the Surgical Field

For Globus Medical (NYSE:GMED), the forecast is nothing short of intriguing. With revenue projected to land within the range of $2.450 billion to $2.475 billion, and non-GAAP EPS anticipated to hit between $2.68 to $2.7, the future seems luminous for the surgical equipment manufacturer.

In addition to these numbers, the company foresees garnering $170 million in synergies from the NuVasive merger over the next three years. This move not only showcases strategic acumen but also underlines the long-term potential for investors considering GMED stock.

Medtronic (MDT): Pioneering Evolution in Medical Technology

Medtronic (NYSE:MDT), a stalwart in the realm of medical technology, stands as a beacon of innovation with its Hugo robotic-assisted surgery system. Through the acquisition of Mazor Robotics in 2018, Medtronic has solidified its presence as a leader in cutting-edge healthcare solutions.

The Hugo system stands out for its modular design, slim profile, and adaptability in hybrid operating rooms. Despite entering the market after trailblazers like ISGR’s systems, Hugo strives to revolutionize everyday procedures, starting with spine surgeries.

Buoyed by an exceptional first quarter performance in fiscal 2024, Medtronic has revised its financial guidance for the upcoming year. The company now projects full-year earnings to fall between $5.08 and $5.16 per share, surpassing the earlier estimate of $5 to $5.10 per share.

With each of its four segments boasting an impressive 6% organic revenue growth in 2024, now could be an opportune moment for investors to seize shares of MDT and ride the wave of success in the medical technology sector.

On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Matthew started writing coverage of the financial markets during the crypto boom of 2017 and was also a team member of several fintech startups. He then started writing about Australian and U.S. equities for various publications. His work has appeared in MarketBeat, FXStreet, Cryptoslate, Seeking Alpha, and the New Scientist magazine, among others.

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