3 Beaten-Down MedTech Stocks Set to Stage a Comeback in 2021
The coronavirus pandemic has been continually taking its toll on the global economy. This is mirrored through the drag-downs of several global indices in recent times. Although, hopes are rising around possibilities of vaccine approvals by this year-end, concerns over a significantly lengthy delivery and distribution time of the immunization doses are keeping the market sentiment bearish.
Concurrently, with the spectre of a full-blown fresh wave of coronavirus cases looming large, investor enthusiasm still remains dampened.
Per a Business Today report, the IMF projects a 2020 global GDP contraction of 4.4% in its latest World Economic Outlook.
MedTech Scenario
Amid a volatile economic backdrop, the MedTech sector put up a stellar performance. Despite this sector getting initially hit by the shutdown of the global manufacturing as well as supply-chain disruptions besides the deferral of elective medical/surgical procedures, tables significantly turned around in the second half of 2020. This turnaround came on the back of launching several COVID-19 diagnostic tests, shift of consumer preferences toward digital healthcare options as well as a steady uptick in emergency medical procedures.
Major MedTech players like Abbott Laboratories ABT and ABIOMED ABMD in particular, reported a significant sequential rebound in their third-quarter 2020 performances.
Ideal Strategy for MedTech Investors Now
Despite the overall stability in the MedTech space, the industry has not been able to withstand the panic sell-off induced by the market meltdown. Hence, the prices of several fundamentally-strong stocks are getting depreciated and being traded at cheaper prices at the moment. Notably, in the pre-pandemic era, these stocks were quite expensive, banking on their solid fundamentals.
Therefore stocks, which are currently trading at low prices but are backed by a robust earnings growth potential, should emerge as attractive bets for MedTech investors now. Once the pandemic-induced economic turmoil subsides, these stocks are likely to bounce back.
3 Stocks to Bet on
The following are a few MedTech companies with a Zacks Rank #2 (Buy) at present that currently offer the best upside potential. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
TransMedics Group, Inc. TMDX: This company’s non-deferrable organ transplant therapy business for patients with end-stage lung, heart and liver failure remained uninterrupted despite the prevalent COVID-19 situation.
Year to date, the stock has dropped 16.9%. For the ongoing year, earnings growth rate is projected at 49.9% while revenue growth rate is anticipated at 81.3%.
Myomo, Inc. MYO: In August 2020, this wearable medical robotics company that offers increased functionality for those afflicted with neurological disorders and upper-limb paralysis, strengthened its MyoPro portfolio with the issuance of new patents in the United States and Europe in relation to the unique wearable robotic brace for arm and hand paralysis.
Year to date, the company has declined 26.9%. However, 2020 earnings growth rate is projected at 79.7% while revenue growth rate for the same period is estimated at 57%.
Exagen, Inc. XGN: This organization has a commitment toward transforming the care continuum for patients afflicted with autoimmune diseases. In this vein, management announced a new study in partnership with Brigham and Women’s Hospital in Boston, MA, in November 2020. This study will assess the incidence and risk factors of rheumatic autoimmune diseases in people who recovered from COVID-19.
Year to date, shares of the company have plunged 44.3%. For 2020, earnings growth rate is projected at 82.5% while the current-year revenue growth rate is expected at 24.5%.
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ABIOMED, Inc. (ABMD) : Free Stock Analysis Report
Abbott Laboratories (ABT) : Free Stock Analysis Report
Myomo, Inc. (MYO) : Free Stock Analysis Report
TransMedics Group, Inc. (TMDX) : Free Stock Analysis Report
Exagen Inc. (XGN) : Free Stock Analysis Report
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