Healthcare companies are pushing the status quo by innovating in areas like drug development and digital health. Despite the rosy long-term prospects, short-term headwinds such as COVID inventory destocking have caused the industry to lag recently - over the past six months, the collective 5.2% gain for healthcare stocks has fallen short of the S&P 500’s 8.5% rise.
Despite the lackluster result, a few diamonds in the rough can produce earnings growth no matter what, and we started StockStory to help you find them. Taking that into account, here is one resilient healthcare stock at the top of our wish list and two we’re swiping left on.
Two Healthcare Stocks to Sell:
Inspire Medical Systems (INSP)
Market Cap: $1.22 billion
Offering an alternative for the millions who struggle with traditional CPAP machines, Inspire Medical Systems (NYSE: INSP) develops and sells an implantable neurostimulation device that treats obstructive sleep apnea by stimulating nerves to keep airways open during sleep.
Why Are We Cautious About INSP?
- Subscale operations are evident in its revenue base of $915.2 million, meaning it has fewer distribution channels than its larger rivals
- Estimated sales decline of 8% for the next 12 months implies a challenging demand environment
Inspire Medical Systems’s stock price of $41.49 implies a valuation ratio of 42.3x forward P/E. Read our free research report to see why you should think twice about including INSP in your portfolio.
IQVIA (IQV)
Market Cap: $30.22 billion
Created from the 2016 merger of Quintiles (a clinical research organization) and IMS Health (a healthcare data specialist), IQVIA (NYSE: IQV) provides clinical research services, data analytics, and technology solutions to help pharmaceutical companies develop and market medications more effectively.
Why Does IQV Give Us Pause?
- The company has faced growth challenges as its 5.1% annual revenue increases over the last two years fell short of other healthcare companies
- Weak constant currency growth over the past two years indicates challenges in maintaining its market share
- Free cash flow margin didn’t grow over the last five years
IQVIA is trading at $167.81 per share, or 12.8x forward P/E. To fully understand why you should be careful with IQV, check out our full research report (it’s free).
One Healthcare Stock to Buy:
Oscar Health (OSCR)
Market Cap: $8.71 billion
Founded in 2012 to simplify the notoriously complex American healthcare system, Oscar Health (NYSE: OSCR) is a technology-focused health insurance company that offers individual and small group health plans through its cloud-native platform.
Why Is OSCR a Top Pick?
- Annual revenue growth of 42.6% over the last two years was superb and indicates its market share increased during this cycle
- Earnings growth has massively outpaced its peers over the last four years as its EPS has compounded at 31.5% annually
- Free cash flow margin grew by 19.9 percentage points over the last five years, giving the company more chips to play with
At $28.62 per share, Oscar Health trades at 25.8x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
