As the Q3 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the healthcare providers & services industry, including Pediatrix Medical Group (NYSE:MD) and its peers.
The healthcare providers and services sector, from insurers to hospitals, benefits from consistent demand, generating stable revenue through premiums and patient services. However, it faces challenges from high operational and labor costs, reimbursement pressures that squeeze margins, and regulatory uncertainty. Looking ahead, an aging population with more chronic diseases and a shift toward value-based care create tailwinds. Digitization via telehealth, data analytics, and personalized medicine offers new revenue streams. Nonetheless, headwinds persist, including clinical labor shortages, ongoing reimbursement cuts, and regulatory scrutiny over pricing and quality.
The 40 healthcare providers & services stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.3% while next quarter’s revenue guidance was 0.6% below.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
Pediatrix Medical Group (NYSE:MD)
With a network of approximately 2,620 affiliated physicians caring for some of the most vulnerable patients, Pediatrix Medical Group (NYSE:MD) provides specialized physician services focused on neonatal, maternal-fetal, pediatric cardiology and other pediatric subspecialty care across 37 states.
Pediatrix Medical Group reported revenues of $492.9 million, down 3.6% year on year. This print exceeded analysts’ expectations by 3.2%. Overall, it was a stunning quarter for the company with a solid beat of analysts’ same-store sales and EPS estimates.
“Our operating results for the third quarter exceeded our expectations and were driven by a combination of reimbursement-related factors, including strong collection activity, higher patient acuity and slightly favorable payor mix, as well as operational consistency,” said Mark S. Ordan, Chief Executive Officer of Pediatrix Medical Group.
Interestingly, the stock is up 36.2% since reporting and currently trades at $23.11.
Is now the time to buy Pediatrix Medical Group? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q3: Guardant Health (NASDAQ:GH)
Pioneering the field of "liquid biopsy" with technology that can identify cancer-specific genetic mutations from a simple blood draw, Guardant Health (NASDAQ:GH) develops blood tests that detect and monitor cancer by analyzing tumor DNA in the bloodstream, helping doctors make treatment decisions without invasive biopsies.
Guardant Health reported revenues of $265.2 million, up 38.5% year on year, outperforming analysts’ expectations by 12.6%. The business had an incredible quarter with a solid beat of analysts’ revenue estimates and full-year revenue guidance exceeding analysts’ expectations.
Guardant Health delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 47% since reporting. It currently trades at $106.25.
Is now the time to buy Guardant Health? Access our full analysis of the earnings results here, it’s free for active Edge members.
Brookdale (NYSE:BKD)
With a network of over 650 communities serving approximately 59,000 residents across 41 states, Brookdale Senior Living (NYSE:BKD) operates senior living communities across the United States, offering independent living, assisted living, memory care, and continuing care retirement communities.
Brookdale reported revenues of $813.2 million, up 3.7% year on year, falling short of analysts’ expectations by 1.7%. It was a softer quarter as it posted a significant miss of analysts’ EPS estimates and a miss of analysts’ revenue estimates.
Interestingly, the stock is up 19% since the results and currently trades at $10.85.
Read our full analysis of Brookdale’s results here.
NeoGenomics (NASDAQ:NEO)
Operating a network of CAP-accredited and CLIA-certified laboratories across the United States and United Kingdom, NeoGenomics (NASDAQ:NEO) provides specialized cancer diagnostic testing services, including genetic analysis, molecular testing, and pathology consultation for oncologists and healthcare providers.
NeoGenomics reported revenues of $187.8 million, up 11.9% year on year. This number surpassed analysts’ expectations by 2.1%. Overall, it was a strong quarter as it also logged EPS in line with analysts’ estimates and an impressive beat of analysts’ revenue estimates.
The stock is up 9.2% since reporting and currently trades at $11.47.
Read our full, actionable report on NeoGenomics here, it’s free for active Edge members.
Elevance Health (NYSE:ELV)
Formerly known as Anthem until its 2022 rebranding, Elevance Health (NYSE:ELV) is one of America's largest health insurers, serving approximately 47 million medical members through its network-based managed care plans.
Elevance Health reported revenues of $50.71 billion, up 12.4% year on year. This result topped analysts’ expectations by 1.5%. It was a strong quarter as it also produced a beat of analysts’ EPS estimates and a narrow beat of analysts’ revenue estimates.
The company lost 252,000 customers and ended up with a total of 45.37 million. The stock is down 9.8% since reporting and currently trades at $319.26.
Read our full, actionable report on Elevance Health here, it’s free for active Edge members.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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