Analyst Sees 3 Red-Hot Medical Technology Stocks as Huge 2018 Buys

Health and Healthcare

Published: December 18, 2017 7:45 am

Last Updated: January 12, 2020 5:22 am

In almost all industries the one thing that continues to drive gains is innovation. Take the car industry as an example: Compare the Model T of 100 years ago to the highest quality Tesla electric car. The changes are stunning, and while 100 years is a long time, the changes are still staggering. One industry where innovation has continued to help make consumers lives better, and in some cases last longer, is medical technology.

Stifel’s medical technology team recently visited with three top companies in their coverage universe. All three are leaders in the specific med-tech silos they occupy and are acknowledged by most on Wall Street as the preeminent firms in their space.

The analysts have updated their research on the companies, and all remain Buy rated. While better suited for aggressive growth accounts, they all could supply strong alpha performance in 2018.

Align Technology

This stock has been on fire over the past year and a recent pullback could be offering investors a great entry point. Align Technology Inc. (NASDAQ: ALGN) designs, manufactures and markets a system of clear aligner therapy, intra-oral scanners and computer-aided design and computer-aided manufacturing (CAD/CAM) digital services for use in dentistry, orthodontics and dental records storage in the United States and internationally.

The company’s Clear Aligner segment offers Invisalign Full, a treatment used for a range of malocclusion. Its Invisalign Teen treatment addresses orthodontic needs of teenage patients, such as compliance indicators, compensation for tooth eruption and six free single arch replacement aligners. And its Invisalign Assist treatment is for anterior alignment and aesthetically-oriented cases.

The Scanners and Services segment offers iTero Scanner, a single hardware platform with software options for restorative or orthodontic procedures, and Restorative software for iTero, a software for GPs, prosthodontists, periodontists and oral surgeons. It also provides Orthodontic software for iTero, a software for orthodontists for digital records storage, orthodontic diagnosis, Invisalign digital impression submission and for the fabrication of printed models and retainers.

Stifel remains positive on the shares and its research report noted this:

We continue to believe that International, Teen and the non-comprehensive Adult market offer Align significant long-term growth opportunities. Internationally, the company expects to grow through breadth and depth. Align’s CFO John Morici spoke to ongoing traction in China, Japan and EMEA, while certain Greenfield markets (India and Brazil) should play a bigger role in coming years. Furthermore, Morici highlighted that Align’s global supply chain effort is just underway, which should further aid international growth in coming years.

The Stifel price target for the shares, which have traded in a stunning 52-week range of $88.56 to $266.41, is $265. The Wall Street consensus price objective is $273.73, and shares closed on Friday at $233.55.

Edwards Lifesciences

This company pioneered the artificial heart valve, and it could be poised for big growth. Edwards Lifesciences Corp. (NYSE: EW) provides products and technologies to treat structural heart disease and critically ill patients worldwide. The company offers transcatheter heart valve therapy products, comprising transcatheter aortic heart valves and their delivery systems for the nonsurgical replacement of heart valves.