MedTech Stocks to Report Earnings on Feb. 10: DGX, ZBH & EW

As the fourth-quarter earnings season progresses, this week marks an important period for many medical-sector companies.

Per the latest Earnings Preview report, the Medical sector’s earnings might have suffered due to a dull macroeconomic scenario and geopolitical uncertainties like tariff issues and healthcare labor shortages. However, the sector is expected to have experienced solid revenue growth, backed by advancements in artificial intelligence (AI), robotics and data analytics. 

Going by the broader Medical sector’s scorecard, 40% of the companies in the sector, representing 73.9% of its market capitalization, reported earnings through Feb. 4. Earnings grew 3.3% year over year on revenue growth of 9.5%. Of the total index members, 75% reported earnings and revenue beat.

Overall, the sector’s fourth-quarter earnings are expected to decline 1.5% despite 9.1% revenue growth. This compares with the third-quarter earnings increase of 4.4% on revenue growth of 10.4%. 

Major industry players like Quest Diagnostics DGX, Zimmer Biomet ZBH and Edwards Lifesciences EW are set to report tomorrow. 

Factors Likely to Have Influenced MedTech Stocks' Earnings

A key trend in the medtech industry is the rapid adoption of digital health solutions. Medical devices, such as wearable health monitors, minimally invasive surgical instruments and 3D printing systems likely drove significant growth in the fourth quarter. 

Mergers and acquisitions activity must have been elevated in the quarter, as major corporations acquired specialized and innovative companies to expand their portfolios. According to a J.P. Morgan report, 27 medtech M&A deals were announced during the quarter, totaling $43.4 billion in upfront cash and equity. 

Medical companies like Abbott and Boston Scientific reported strong revenue growth, with notable gains in their specialized device segments. Abbott’s medical devices arm gained 12.3%, led by double-digit growth in Electrophysiology, Heart Failure, Diabetes Care and Rhythm Management. Boston Scientific’s Cardiology division saw 18.2% growth, reinforcing the sector’s resilience. 

Despite these opportunities, the medical sector continues to face substantial challenges that weigh on operational efficiency. In China, volume-based procurement (VBP) has opened the fast-growing market to multinational medtech products. Aggressive price reductions — often 50% to 90% lower than other global markets — have placed significant pressure on profitability. Recent earnings underscore these trends. Thermo Fisher reported a 10% year-over-year increase in the cost of goods sold, driving a 150-basis-point contraction in gross margin over the same period. Abbott indicated that China VBP represented a meaningful headwind of approximately $400 million in 2025. In addition, cybersecurity risk adds to the worry. 

MedTech Stocks to Watch

Quest Diagnostics: In the fourth quarter, the core Diagnostics Information Services business is expected to have delivered strong revenues, driven by organic growth in its physician, hospital and consumer channels. The company is expected to have generated robust sales growth across its Advanced Diagnostics, Brain Health and Oncology arms. DGX’s acquisition of select clinical testing assets from Fresenius Medical Care might have also contributed to its top-line growth. 

(Read more: Here's How Quest Diagnostics Is Placed Ahead of Q4 Earnings)

The Zacks Consensus Estimate for revenues is pegged at $2.75 billion, indicating an increase of 4.8% from the year-ago reported figure. The Zacks Consensus Estimate for EPS suggests a 5.4% rise to $2.35.

During the fourth quarter, DGX’s shares fell 4.5% compared with the industry’s 3.7% decline.

Per our proven model, a stock with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates. This is not the case here, as you can see below. You can see the complete list of today’s Zacks #1 Rank stocks here.

DGX has an Earnings ESP of 0.00% and a Zacks Rank of 2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Quest Diagnostics Incorporated Price and EPS Surprise

Quest Diagnostics Incorporated price-eps-surprise | Quest Diagnostics Incorporated Quote

Zimmer Biomet: In the fourth quarter, Hips business is expected to have witnessed growth on the back of the company’s comprehensive suite of solutions in navigation, direct anterior stems and surgical impactors. Within the Knees business, the company is likely to have gained on the back of increasing penetration of the Persona OsseoTi cementless total knee system. The S.E.T business is expected to have continued its growth run, led by key areas like CMFT and upper extremities. Strong ROSA placements likely persisted in the to-be-reported quarter. 

(Read more: Zimmer Biomet to Report Q4 Earnings: Here's What to Expect)

The Zacks Consensus Estimate for revenues is pegged at $2.20 billion, suggesting an 8.9% rise from the year-ago reported figure. The Zacks Consensus Estimate for earnings is pinned at $2.38 per share, indicating a 3% rise from the year-ago reported number.

During the fourth quarter, the stock fell 15.3% compared with the industry’s 10.8% decline.

ZBH has an Earnings ESP of -0.40% and a Zacks Rank #3.

Zimmer Biomet Holdings, Inc. Price and EPS Surprise

Zimmer Biomet Holdings, Inc. price-eps-surprise | Zimmer Biomet Holdings, Inc. Quote

Edwards Lifesciences: In the fourth quarter, the Transcatheter Aortic Valve Replacement arm is likely to have delivered a strong performance across multiple regions, supported by new evidence, guideline updates and expanded education. The PASCAL and EVOQUE systems are expected to have gained traction globally. Meanwhile, the Surgical Structural Heart arm might have delivered a strong performance, driven by the global adoption of its premium RESILIA portfolio, including MITRIS, INSPIRIS and KONECT.

(Read more: Edwards Lifesciences' Q4 Earnings on Deck: Here's What to Expect)

The Zacks Consensus Estimate for revenues is pegged at $1.54 billion, suggesting 11.1% growth from the year-ago reported figure. The Zacks Consensus Estimate for earnings is pinned at 62 cents per share, indicating a 5.1% rise from the year-ago reported number.

During the fourth quarter, the stock climbed 4.8% compared with the industry’s 3.8% growth.

EW has an Earnings ESP of 0.00% and a Zacks Rank #3.

Edwards Lifesciences Corporation Price and EPS Surprise

Edwards Lifesciences Corporation price-eps-surprise | Edwards Lifesciences Corporation Quote

Zacks Names #1 Semiconductor Stock

This under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.

With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.

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

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research