What to Expect From These 2 MedTech Stocks This Earnings Season?

Overall, the sector’s second-quarter earnings are expected to decline 15.2% despite 6.1% revenue growth. This compares with the first-quarter earnings decrease of 2.3% on revenue growth of 7.1%. Based on the latest trends, the Medical sector is among the three sectors expected to post a year-over-year earnings decline in the second quarter of 2026.

Major industry players like Globus Medical GMED and Resmed RMD are set to report tomorrow. 

Factors Likely to Influence MedTech Stocks' Financial Results

According to a report by McKinsey & Company, hospital budget constraints remain a key risk, as many healthcare providers continue to operate under financial pressure, which could lead to delays or reductions in capital expenditures on high-cost medical equipment, such as MRI and CT scanners, surgical robots and advanced imaging systems. 

Reimbursement pressure is another concern, as changes to Medicare, Medicaid, or private insurer payment policies could reduce hospital revenues and limit spending on new medical technologies. Together, these factors might have acted as headwinds for MedTech players in the second quarter. 

Rising AI adoption should have supported demand for diagnostic software, imaging tools, clinical decision support and workflow automation. For instance, GE HealthCare posted strong revenue growth driven by robust Advanced Imaging Solutions (“AIS”) portfolio. Healthcare services and technology are also expected to have grown faster than many traditional healthcare segments, benefiting companies focused on digital platforms, analytics and cloud-based solutions. 

Growth in specialty drugs, oncology, rare diseases and precision medicine should have increased demand for infusion systems, diagnostics, monitoring devices and laboratory equipment. Abbott’s Cancer Diagnostics business grew 13%, driven by mid-teens growth in the Cologuard colorectal cancer screening test. An increasing aging population could have driven long-term demand for cardiovascular devices, potentially benefiting companies such as Edwards Lifesciences, whose transcatheter aortic valve replacement (TAVR) and structural heart products are widely used in the treatment of elderly patients with heart valve disease.

The growing adoption of healthcare data and analytics might have supported companies with robust digital platforms and proprietary clinical data. In addition, stronger merger and acquisition activity could have provided growth opportunities for innovative small- and mid-cap MedTech companies.

MedTech Stocks to Watch

Globus Medical: Globus Medical is expected to have benefited from the continued strength of its U.S. Spine business. Categories such as standard fixation and MIS pedicle screws, expandable TLIF (Transforaminal Lumbar Interbody Fusion), ALIF (Anterior Lumbar Interbody Fusion), posterior cervical and cervical plating may have been key contributors to the performance. Further, strong performance across the EMEA and Latin America regions likely supported International Spine business performance. 

The Nevro acquisition should have benefited revenues. Additionally, Enabling Technologies revenues might have been supported by growing adoption of the ExcelsiusGPS platform and an expanding lease-and-rental model that likely drove recurring implant revenues.

The Zacks Consensus Estimate for the company’s second-quarter 2026 revenues is pegged at $786.9 million, suggesting 5.6% growth from the year-ago reported figure. The Zacks Consensus Estimate for net earnings of $1.12 per share indicates a 30.3% increase from the year-ago reported figure.

During the second quarter, the company’s shares lost 9.9% compared with the industry’s 1.3% 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.

Globus Medical has an Earnings ESP of 0.00%. The company currently carries a Zacks Rank #3.

Resmed: Resmed’s Mask and other sales arm is expected to have witnessed continued growth in resupply and new patient setups, while the VirtuOx acquisition must have contributed to incremental revenues. Device sales numbers are likely to reflect the ongoing combined availability of the company’s AirSense 10 and AirSense 11 sleep devices, supporting underlying global demand. The company’s use of ML, AI and generative AI technology in its digital health products might have positively impacted its overall top line. Redmed’s Residential Care Software arm might have been affected by a challenging growth environment for the senior living and long-term care vertical. 

In June, ResMed completed its acquisition of Noctrix Health, Inc., expanding its clinical sleep health portfolio with therapies for the treatment of Restless Legs Syndrome (“RLS”).

The Zacks Consensus Estimate for the company’s fiscal fourth-quarter revenues is pegged at $1.46 billion, indicating an increase of 8.4% from the year-ago reported figure. The Zacks Consensus Estimate for EPS suggests a 13.7% rise to $2.90.

During the fiscal fourth quarter, the company’s shares fell 12.4% compared with the industry’s 10.2% decline. 

Resmed has an Earnings ESP of -1.39%. The company currently carries a Zacks Rank #3.

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

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