Yahoo Finance Zacks Industry Outlook Highlights Hims & Hers Health, Enovis Corp and Health Catalyst
For Immediate Release
Chicago, IL – May 29, 2024 – Today, Zacks Equity Research discusses Hims & Hers Health HIMS, Enovis Corp ENOV and Health Catalyst HCAT.
Industry: Medical Info Systems
Link: https://www.zacks.com/commentary/2280072/3-medical-info-systems-stocks-to-buy-as-genai-transforms-healthcare
The Medical Info Systems industry has witnessed exponential growth thanks to the growing demand for contactless services. The need for a distant treatment option and a paperless environment has led to a tremendous upsurge in digital healthcare options. Added to this is the latest GenAI wave, which has significantly sped up the acceptance and usage of advanced digital healthcare and telemedicine on a global scale.
Per GlobalData research, the use of AI in the medical device market is expected to witness a CAGR of 29.1% during 2023-2027. The market's growth will be propelled by the growing demand for healthcare systems to reduce time and costs and improve detection capabilities, particularly when diagnosing a growing number of patients with complex profiles. As much as 80% of health systems claimed to have plans to increase their investment levels in digital health over the next five years (a HIMSS report).
The growing demand for all kinds of digital healthcare support, including telehealth, cloud computing, artificial intelligence, robotics and analytics, chatbots and virtual assistants and 3D printing, has created a unique opportunity for companies like Hims & Hers Health, Enovis Corp and Health Catalyst. However, this healthcare system's excessive dependence on IT comes with its share of risks. Any data disruption in the cloud-based service might lead to a massive loss of information, thereby leading to a breakdown of the system.
Industry Description
The Zacks Medical Info Systems industry comprises companies that develop and market healthcare information systems. These companies offer software and hardware solutions to healthcare providers with secure access to real-time clinical, administrative and financial data in a time-efficient manner.
Focus on patient satisfaction, security of patient data and administrative cost control has increased the need for big data, 3D printing, blockchain and AI. Industry players like Omnicell and Allscripts are raking in millions from the sale of software and related hardware, professional services and IT outsourcing services, and recurring service contracts for software maintenance and transaction processing services.
3 Trends Shaping the Future of the Medical Information Industry
Growing Demand for Remote Healthcare: It has been a year now since the pandemic is over but the need for contactless services is growing consistently. Within the medical information systems space, the remote patient monitoring segments continue to grow at a fast rate, courtesy of the rapid increase in usage of wearable devices and telehealth services.
A Startech Up report in 2023 stated that the use of AI in healthcare is helping medical professionals in several ways. For instance, it is accelerating the diagnosis process and automating hospital workflows through robotics, AI-driven chatbots to check symptoms and so on. Going by a recent Custom Market Insights report, the global Smart Healthcare Products market was valued at $145.9 billion in 2023 and is expected to reach $485.71 billion by 2032, at a CAGR of 12.78%.
AI and Health: The medical sector is one of the major adopters of AI, which is currently being used to synthesize new compounds for drugs and create devices for more precise measurement and faster and more accurate diagnosis. One common application of AI has been in diagnostic settings, where it quickly and precisely detects image abnormalities that might be challenging for the human eye to spot.
Several medical device makers are also developing surgical robots with AI integration for complex and specialized procedures. Further, electronic health records, electronic medical records, predictive analytics and real-time alerting have been gaining prominence. A recent National Institute of Health report revealed that in the field of clinical decision-making, AI has demonstrated remarkable capabilities for predicting and classifying diagnoses, as well as providing recommendations and insights.
AI systems have been successful in multiple medical imaging use cases, such as detecting mitosis in breast cancer histology images, classifying skin cancer with dermatologist-level accuracy, diagnosing diabetic retinopathy from retinal fundus photographs and predicting cardiovascular risk factors from retinal fundus photographs.
Rising Instances of Cyber Attacks: As healthcare becomes more wired and interconnected, cybersecurity is the primary concern of hospitals. In fact, security flaws are being increasingly found in electronic medical device operating systems or other devices like ECG machines, imaging scanners, infusion pumps and telemetry systems. Indeed, the pandemic has led to growing cyber dependency, which has made the space vulnerable to cyber-attacks.
Between October and December 2023, Henry Schein became the victim of consecutive cyberattacks. Further, in February 2024, Change Healthcare — a unit of UnitedHealth Group — was impacted by a cybersecurity incident.
Zacks Industry Rank
The Zacks Medical Info Systems industry falls within the broader Zacks Medical sector. It carries a Zacks Industry Rank #94, which places it in the top 38% of more than 250 Zacks industries.
The group's Zacks Industry Rank, which is basically the average of the Zacks Rank of all the 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.
We will present a few stocks that have the potential to outdo the market based on a strong earnings outlook. However, it's worth taking a look at the industry's shareholder returns and current valuation first.
Industry Underperforms S&P 500 and Sector
The industry has underperformed the Zacks S&P 500 composite as well as the sector over the past year.
The industry has lost 25.8% in the past year against the Zacks Medical sector's growth of 6.3%. The S&P 500 has risen 26.1% in the said time frame.
Industry's Current Valuation
On the basis of forward 12-month price-to-sales (P/S), which is commonly used for valuing medical stocks, the industry is currently trading at 1.30X compared with the S&P 500's 3.96X and the sector's 2.86X.
Over the last five years, the sector has traded as high as 12.37X, as low as 1.07X, and at the median of 3.53X.
3 Medical Info Systems Stocks to Bet On
Hims & Hers Health operates a telehealth platform that connects consumers to licensed healthcare professionals globally. The company is consistently witnessing strong market acceptance of its range of curated prescription and non-prescription health and wellness products and services.
The company has been investing in a disciplined approach to scale its platform. This is significantly driving the number of subscribers. The company is also benefiting from its strategy to ensure that its solutions are placed at attractive price points.
Hims & Hers Health currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for 2024 earnings indicates a stupendous 263.6% improvement from the 2023 level. For the same period, the company is expected to report sales growth of 40.6%.
Enovis focuses on developing clinically differentiated solutions worldwide. It majorly works in the field of reconstructive surgery, rehabilitation, pain management and physical therapy. Of late, the company is registering strong growth banking on continued execution in Prevention & Recovery (P&R), strong growth in Recon and the addition of recent acquisitions — Lima and Novastep.
Enovis currently holds a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for 2024 earnings indicates 8.3% growth from the 2023 level. For 2024, the company is expected to report sales growth of 24.7%.
Health Catalyst provides data and analytics technology and services to healthcare organizations committed to being the catalyst for massive, measurable and data-informed healthcare improvement. Its customers leverage the cloud-based data platform, powered by data from more than 100 million patient records and encompassing trillions of facts as well as its analytics software and professional services expertise, to make data-informed decisions and realize measurable clinical, financial and operational improvements.
Health Catalyst currently carries a Zacks Rank #2. The Zacks Consensus Estimate for 2024 earnings indicates a 146.7% improvement from the 2023 level. For 2024, the company is expected to report revenue growth of 4.1%.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
Join us on Facebook: https://www.facebook.com/ZacksInvestmentResearch/
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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
Health Catalyst, Inc. (HCAT) : Free Stock Analysis Report
Hims & Hers Health, Inc. (HIMS) : Free Stock Analysis Report
Enovis Corporation (ENOV) : Free Stock Analysis Report
