From novel pharmaceuticals to telemedicine, most healthcare companies are on a mission to drive better patient outcomes. But speed bumps such as inventory destockings have persisted in the wake of COVID-19, and over the past six months, the industry has pulled back by 9.4%. This performance was disheartening since the S&P 500 held its ground.
A cautious approach is imperative when dabbling in these businesses as regulation is another unpredictable element that can affect their earnings potential. With that said, here are three healthcare stocks best left ignored.
Market Cap: $1.31 billion
With technology that automatically adjusts insulin delivery based on continuous glucose monitoring data, Tandem Diabetes Care (NASDAQ:TNDM) develops and manufactures automated insulin delivery systems that help people with diabetes manage their blood glucose levels.
Why Is TNDM Risky?
Tandem Diabetes’s stock price of $19.75 implies a valuation ratio of 37.1x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than TNDM.
Market Cap: $20.12 billion
With over 600 million tests performed annually and involvement in 90% of FDA-approved drugs in 2023, Labcorp (NYSE:LH) provides laboratory testing services and drug development solutions to doctors, hospitals, pharmaceutical companies, and patients worldwide.
Why Does LH Fall Short?
At $240.43 per share, Labcorp trades at 15.1x forward price-to-earnings. Check out our free in-depth research report to learn more about why LH doesn’t pass our bar.
Market Cap: $3.05 billion
Founded in 1974, BrightSpring Health Services (NASDAQ:BTSG) offers home health care, hospice, neuro-rehabilitation, and pharmacy services.
Why Are We Wary of BTSG?
BrightSpring Health Services is trading at $17.21 per share, or 32.8x forward price-to-earnings. To fully understand why you should be careful with BTSG, check out our full research report (it’s free).
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