Dj Resmed Inc. Stock Rises Friday, Still Underperforms Market

Chemed CHE continues to be hurt by macroeconomic impacts on business, seasonality factors and the competitive landscape. The challenges within the Roto-Rooter business dented the third quarter result. The stock carries a Zacks Rank #4 (Sell) at present.

Concerning Factors Pulling CHE Stock Down

The Roto-Rooter business has been navigating the ongoing headwinds in consumer sentiment and consumer spending within its sector. Recently, hit by the business’s ongoing challenges, management has decided to look for a new marketing agency to provide a fresh look at how Roto-Rooter's paid search program is operating. That process culminated in Roto-Rooter transitioning to a new SEM in early July.

The ramp-up time required by the new provider contributed to some of the softness in demand residential revenues experienced in the third quarter. However, management is optimistic that the new provider will soon overcome this situation and will provide more positive results going forward.

Further, the ongoing global economic conditions, such as general labor, supply chain and inflationary pressure, along with political and regulatory developments, are escalating expenses, particularly in staffing and labor costs. In recent times, Chemed’s performance has been affected by the inflationary trend, increased logistics costs, and higher employee-related expenses. In the third quarter, the cost of services provided and goods sold rose 9.3% year over year, while selling, general & administration expenses increased 2.4%.

Meanwhile, Chemed’s Roto-Rooter operates in the highly competitive market for sewer, drain, and pipe cleaning and plumbing repair businesses. Competition is fragmented in most markets, with local and regional firms providing much of the competition. Besides, Hospice care in the United States is competitive as programs for hospice services are generally uniform. As the hospice care industry is highly fragmented, VITAS competes with a large number of organizations based on its ability to deliver quality, responsive services. Both these segments could face challenges in their operations if they are unable to innovate and effectively respond to market trends.

Chemed Corporation Price

Chemed Corporation price | Chemed Corporation Quote

Over the past three months, CHE’s shares dipped 1.6% compared to the industry’s 0.1% drop. Although management expects the Roto-Rooter business to overcome the ongoing crisis, the estimated time of revival is still unclear.

Favorable Factors for CHEMED

Chemed’s VITAS segment is consistently registering accelerated improvement, supported by increased growth in licensed healthcare professionals and strong admissions. Corresponding growth in the patient census has returned VITAS to normalized operating conditions.

VITAS’ performance was solid in the third quarter, with 17.3% growth year over year, backed by a full-quarter contribution from the $85 million acquisition of Covenant Health. This acquisition boosted VITAS’ operational metrics, including a 6.3% improvement in admissions and a 15.5% increase in ADC (Average Daily Census). Management is optimistic about VITAS consistently demonstrating the ability to accelerate the hiring and retention of licensed healthcare professionals.

Within the Hospice segment, we believe that Chemed is well poised to register growth driven by the growing aging population. As people age, the prevalence of chronic and life-limiting illnesses, such as cancer, heart disease and dementia, also increases. This demographic trend drives the hospice market, creating a greater demand for end-of-life care and supportive services.

Further, growing long-term care services for chronic diseases worldwide, such as COPD and heart failure, are likely to boost companies' growth within the industry. According to a report by Market Data Forecast, the global hospice market is estimated to witness a CAGR of 9.1% between 2023 and 2028.

Key Picks

Some better-ranked stocks in the broader medical space are Haemonetics HAE, Globus Medical GMED and ResMed RMD. While ResMed sports a Zacks Rank #1 (Strong Buy) at present, Haemonetics and Globus Medical carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Haemonetics has an earnings yield of 5.02% compared with the industry’s 1.18%. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 19.39%. Its shares have risen 1.8% compared with the industry’s 23.1% growth in the past year. Estimates for Haemonetics’ 2025 EPS have moved north 0.4% to $4.59 in the past 30 days.

Estimates for Globus Medical’s 2024 EPS have remained constant at $2.84 in the past 30 days. Shares of the company have surged 60.6% in the past year compared with the industry’s growth of 32.7%. GMED’s earnings surpassed estimates in each of the trailing four quarters, the average beat being 12.1%. In the last reported quarter, it delivered an earnings surprise of 10.3%.

Estimates for ResMed’s fiscal 2025 EPS have risen 2.7% in the past 30 days. Shares of the company have surged 86.3% in the past year compared with the industry’s 32.1% growth. RMD’s earnings surpassed estimates in each of the trailing four quarters, the average beat being 6.4%. In the last reported quarter, it delivered an earnings surprise of 8.4%.

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QIAGEN's QGEN business is expected to get a boost from its growing molecular diagnostic market, expanded test menu and growth-driving strategic collaborations. Yet, the company faces a challenging macro environment. An intense competitive environment and exchange rate fluctuations may dent the results of operations. The stock carries a Zacks Rank #3 (Hold) at present.

Factors Driving QGEN Stock

Molecular testing is the most dynamic segment of the global in vitro diagnostics market. QIAGEN offers one of the broadest portfolios of molecular technologies for healthcare. The range of assays for diseases and biomarkers speeds up and simplifies laboratory workflow and standardizes many lab procedures.

QGEN has more than 30 master collaboration agreements with pharmaceutical industry customers, some with multiple co-development projects. In the third quarter of 2024, sales in the Diagnostic Solutions product group grew 10% compared with the year-ago period, driven by solid gains in consumables sales. The QuantiFERON test delivered its sixth consecutive quarter of sales above $100 million, supported by solid demand from conversion gains against the tuberculin skin test in all regions.

To support internal growth, QIAGEN heavily invests in research and development (R&D) for the menu expansion of its key platforms. R&D expenditures represented 8.9% of the third-quarter sales, anticipating a further rise in the coming months as the company pursues regulatory approvals of certain assays or instruments. QIAGEN marked several important product launches and key milestones, positioning it well to meet its 2028 goals. Particularly, QIAstat drove 40% CER sales growth from increasing demand worldwide and more than 150 placements of instruments.

In September, the QIAstat-Dx syndromic testing systems and associated assays received CE-marking under the European Union's new In-Vitro Diagnostic Medical Devices Regulation. Building on the success in syndromic testing, QIAGEN is also expanding the ecosystem for QIAstat into precision medicine, signing a number of pharma collaborations to use this technology in precision medicine applications.

QIAGEN N.V. Price

QIAGEN N.V. price | QIAGEN N.V. Quote

QIAGEN’s long-term business strategy involves entering into strategic alliances and marketing and distribution arrangements with academic, corporate and other partners relating to the development, commercialization, marketing and distribution of certain of their existing and potential products. In September 2024, the company announced a collaboration with Eli Lilly and Company to support the development of a QIAstat-Dx in-vitro diagnostic to detect APOE genotypes, which can play a key role in Alzheimer’s disease diagnosis.

The company also extended its strategic partnership with Bio-Manguinhos/Fiocruz to enhance malaria and dengue detection in Brazil’s national screening programs. Another agreement expands its collaboration with AstraZeneca beyond oncology to develop and commercialize CDx in chronic diseases.

Year to date, shares of QGEN have lost 5.5% compared with the industry’s 10.3% decline. The company continues to benefit from favorable molecular diagnostics industry dynamics. With its consistent focus on expansion through strategic collaborations and research and development, we expect the stock to gain momentum in the coming days.

Factors Impeding QGEN's Growth

QIAGEN currently markets products in more than 100 countries. Its international operations are subject to a variety of risks arising from the economy, political outlook, language and cultural barriers in the countries it operates. In many of these emerging markets, QIAGEN faces several risks, which include economies that may be dependent on only a few products and are therefore subject to significant fluctuations, weak legal systems that may affect its ability to enforce contractual rights, exchange controls, unstable governments, and privatization or other government actions affecting the flow of goods and currency.

In the quarter under review, sales in the Asia Pacific, Japan and the Rest of World region declined 2% year over year, reflecting challenging macro demand trends in China.

Recording more than 50% of its revenues from the international market, QIAGEN is highly exposed to the risk of foreign currency movement. The situation may worsen with the strengthening of the domestic currency against high-focus nations. Any unanticipated currency headwinds in high-focus markets may drag the top and the bottom line further in the future. For instance, foreign currency transactions in the third quarter of 2024 resulted in net losses of $1.1 million. The company continues to expect currency movements against the U.S. dollar to have a negative impact on full-year net sales of about 1% point and an adverse effect of about 2 cents per share on adjusted EPS results.

Considering QIAGEN’s huge gamut of services, the company is also susceptible to competitive headwinds. The company is facing increasing competition from firms that provide competitive pre-analytical solutions and other products used by QIAGEN’s customers. The markets for some of the company’s products are very competitive and price-sensitive. Other product suppliers may have significant advantages in terms of financial, operational, sales, and marketing resources, as well as experience in research and development.

Key Picks

Some better-ranked stocks in the broader medical space are Haemonetics HAE, Globus Medical GMED and ResMed RMD. While ResMed sports a Zacks Rank #1 (Strong Buy) at present, Haemonetics and Globus Medical carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Haemonetics has an earnings yield of 5.02% compared with the industry’s 1.18%. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 19.39%. Its shares have risen 1.8% compared with the industry’s 23.1% growth in the past year. Estimates for Haemonetics’ 2025 EPS have moved north by 0.4% to $4.59 in the past 30 days.

Estimates for Globus Medical’s 2024 EPS have remained constant at $2.84 in the past 30 days. Shares of the company have surged 60.6% in the past year compared with the industry’s growth of 32.7%. GMED’s earnings surpassed estimates in each of the trailing four quarters, the average beat being 12.1%. In the last reported quarter, it delivered an earnings surprise of 10.3%.

Estimates for ResMed’s fiscal 2025 EPS have risen 2.7% in the past 30 days. Shares of the company have surged 86.3% in the past year compared with the industry’s 32.1% growth. RMD’s earnings surpassed estimates in each of the trailing four quarters, the average beat being 6.4%. In the last reported quarter, it delivered an earnings surprise of 8.4%.

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Medtronic plc MDT recently received Food and Drug Administration (“FDA”) clearance for its new InPen app, which features missed meal dose detection. This latest FDA clearance should pave the way for the launch of the company’s Smart MDI system, which combines the InPen smart insulin pen with its newest Simplera continuous glucose monitor (CGM).

Medtronic will initiate a limited market release with existing standalone CGM and InPen customers, followed by a broad commercial launch.

MDT’s Likely Stock Trend Following the News

Subsequent to the news, the share price of MDT moved north 0.7% to $84.74 yesterday.

The latest development is likely to boost the company’s Diabetes segment. The company is gaining a high level of synergies from its continuous effort to develop diabetes management products. Medtronic is experiencing continued adoption of the MiniMed 780G automated insulin delivery system, along with increasing CGM attachment rates and the continued rollout of Simplera Sync. Accordingly, we expect market sentiment toward MDT stock to continue to remain positive surrounding this news.

Medtronic boasts a market capitalization of $116.20 billion. The company delivered an average earnings surprise of 3.07% in the trailing four quarters.

Importance of the FDA Approval

The FDA nod is a significant leap forward for those on multiple daily injections, offering intelligent dosing insights and simplifying diabetes management. For diabetic patients who need insulin injections daily, bolusing before a meal is essential as it helps regulate glucose levels and prevents blood sugar spikes after eating. Minimizing the frequency of these glucose spikes reduces the risk of both short and long-term complications. It is estimated that individuals with diabetes regularly miss one out of three doses. The InPen app’s Missed Dose alert function helps minimize the frequency of these glucose highs.

With this clearance, the Smart multiple daily injection (MDI) system will be the first in the market to recommend corrections for missed or inaccurate insulin doses. It provides real-time, personalized insights for individuals on MDI therapy.

Industry Prospects Favor Medtronic

Per a Grand View Research report, the global diabetes devices market was valued at $30.31 billion in 2023 and is projected to witness a compound annual growth rate of 7.45% from 2024 to 2030. The market is primarily driven by the growing prevalence of diabetes, advanced technology, the growing usage of insulin-delivery devices and the rise in obesity rates.

Other Recent Developments by MDT

Last month, Medtronic shared long-term data from its SPYRAL HTN-ON MED clinical trial. The trial data showed significantly greater reductions in 24-hour ambulatory systolic blood pressure and office-based systolic blood pressure in subjects who underwent radiofrequency renal denervation with the company’s Symplicity Spyral renal denervation system compared to sham patients at two years. The findings were presented at the 2024 Transcatheter Cardiovascular Therapeutics Conference.

The same month, Medtronic received FDA approval for its Affera Mapping and Ablation System with Sphere-9 Catheter. It is an all-in-one, high-density mapping and pulsed-field and radiofrequency ablation catheter for treating persistent atrial fibrillation and RF ablation of cavotricuspid isthmus-dependent atrial flutter.

MDT Share Price Performance

In the past year, MDT’s shares have risen 8.1% compared with the industry’s 19.8% growth.

MDT’s Zacks Rank and Key Picks

Medtronic currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space are Haemonetics HAE, Globus Medical GMED and ResMed RMD. While ResMed sports a Zacks Rank #1 (Strong Buy) at present, Haemonetics and Globus Medical carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Haemonetics has an earnings yield of 5.02% compared with the industry’s 1.18%. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 19.39%. Its shares have risen 1.8% compared with the industry’s 23.1% growth in the past year. Estimates for Haemonetics’ 2025 EPS have moved north 0.4% to $4.59 in the past 30 days.

Estimates for Globus Medical’s 2024 EPS have remained constant at $2.84 in the past 30 days. Shares of the company have surged 60.6% in the past year compared with the industry’s growth of 32.7%. GMED’s earnings surpassed estimates in each of the trailing four quarters, the average beat being 12.1%. In the last reported quarter, it delivered an earnings surprise of 10.3%.

Estimates for ResMed’s fiscal 2025 EPS have risen 2.7% in the past 30 days. Shares of the company have surged 86.3% in the past year compared with the industry’s 32.1% growth. RMD’s earnings surpassed estimates in each of the trailing four quarters, the average beat being 6.4%. In the last reported quarter, it delivered an earnings surprise of 8.4%.

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