2 Healthcare stocks are down 23% or more this year, which could reverse

 Despite the recovering stock market, some companies continue to head south. Many of these corporations deal with company-specific issues and are punished by investors. The good news is that if these companies can bounce back from these issues, patient investors buying the stock now may be richly rewarded.

With that said, let's consider two stocks down 23% or more that could end up being excellent picks: CVS Health (NYSE: CVS ) and Tandem Diabetes Care (NASDAQ: TNDM )

1. CVS Health

CVS Health is one of the biggest players in the US healthcare space, but it's been dealing with its share of problems lately, which have contributed to its poor stock market performance. In the first quarter, the company significantly lowered its 2023 earnings per share (EPS) estimate. Initially, EPS was expected to be between $7.73 and $7.93, but the new range is between $6.90 and $7.12.

ninvestors do not respond well to changes in earnings projections if the change is in that direction. Additionally, CVS Health's first quarter results, while not bad, were not great. The company's revenue rose 11% year over year to $85.3 billion. Overall, CVS's adjusted earnings per share fell nearly 7% to $1.65.

Still, there are big reasons to expect CVS Health to bounce back, especially for long-term investors. Although CVS Health is best known as a pharmacy chain, it boasts an insurance arm through Aetna and a primary care business through its recent acquisition of Oak Street Health. These three complementary units form the ecosystem in which CVS serves patients at different stages of their medical care journey: primary care, third-party payer Aetna and its retail drug sales.

Another recent CVS Health acquisition was Signify Health, a home health company that focuses on Medicare patients. Signify Health offers a range of services, including home health assessments, through its network of more than 10,000 physicians in all 50 US states to help connect patients to the care they need – including social determinants of well-being – and improve health outcomes.

Signify Health thinks that with the help of CVS, it could improve health outcomes and help reduce costs — two things that have been hot topics of debate in the US for the past decade. Signify wasn't consistently profitable before the acquisition, but with the support of CVS, its growth story could just begin.

The entire CVS Health umbrella will benefit from an important long-term trend: the world's aging population, as people need more medical services as they age. So despite CVS Health's recent troubles, it pays to be patient. The company also has an excellent dividend profile. CVS Health has increased its payout by 21% over the past three years, and its current yield of 3.4% is much higher than the S&P 500's average dividend yield of 1.54%.

CVS Health's consistent dividend makes the company more attractive to long-term investors

2. Tandem diabetes care

Tandem Diabetes Care is a medical device specialist with a focus on insulin pump development. The company currently makes most of its money by selling its t:slim X2 pump, but recently Tandem's financial results have not been impressive.

In the first quarter, the company's revenue fell nearly 4% year-over-year to $169.4 million. Its growth rate has declined almost consistently over the past three years, due in part to an inflationary macroeconomic backdrop and the possibility of a recession affecting patients and their ability to afford the company's insulin pumps, resulting in a smaller supply of pumps than the company should have. I liked it.

Additionally, Tandem Diabetes Care is not yet profitable. In the first quarter, the company's net loss per share of $1.92 was much worse than the loss per share of $0.23 the company reported in the comparable period of the previous fiscal year.

How could Tandem Diabetes Care turn things around? First, it's important to note that the company still has a massive addressable market. Tandem Diabetes Care focuses on regions (domestic and international) where it estimates the total addressable population of people living with diabetes to be approximately 10 million. Insulin administration is vital for many of these patients, especially those with type 1. However, many patients still rely on painful multi-day injections (MDIs). In the US, only 39% of patients with type 1 diabetes use insulin pumps.

Tandem Diabetes Care hopes to change them. The company currently has an installed base of 430,000 patients, which is almost half of its goal of 1 million customers. The company estimates its new customers are split roughly half-and-half between those switching from MDI and those switching from competing pumps.

One of the best selling points of Tandem's t:slim X2 is that it can be paired with continuous glucose monitoring devices like the DexCom G6, which helps predict blood glucose levels in advance and adjust insulin delivery accordingly. t:slim X2 is not the only pump with this function. Still, it holds its own against others developed by much larger companies. Evidence of this is Tandem Diabetes' fairly impressive (and growing) installed base and the fact that half of its new customers are switching from other pumps.

Once the economy improves, shipments of Tandem Diabetes pumps could start to grow year-over-year again along with the top line. And as the company's installed base increases, so should sales for supplies and accessories included in the t:slim X2, as well as pump renewals from existing customers (the company's renewal cycle is five years).

Meanwhile, Tandem Diabetes Care also hopes to improve its gross margins — to 65% by 2027, compared to 52% last year — by reducing its manufacturing costs, among other things. Higher revenues and margins could ultimately drive profits for the medical device specialist. As such, Tandem Diabetes Care could see a solid share price return as it continues to make inroads into the huge diabetes market.

In the ever-evolving world of health care, some stocks have seen a recent decline, down 23% or more this year. However, savvy investors see this as a potential buying opportunity as these companies have strong fundamentals and a promising outlook. In this article, we'll focus on two healthcare stocks that have endured a tough year but have the potential to bounce back, making them attractive investments for those looking to the future.

[Company A]

Amid recent market volatility, [Company A], a leading biotech firm, experienced a significant decline of over 23%. Despite this setback, the company remains a beacon of innovation in healthcare. [Company A], known for its pioneering research and development efforts, has a robust pipeline of potential breakthrough drugs and therapies.

Additionally, recent regulatory approvals for some of their products have paved the way for potential revenue growth in the coming quarters. With increasing demand for their specialty treatments and drugs, investors are increasingly optimistic about [Company A's] future performance.

Prudent cost management strategies and continued collaboration with leading healthcare organizations further strengthen the company's potential to bounce back from this year's downturn.

[Company B]

[Company B], a leading manufacturer of medical devices, has also seen a significant decline in its stock value, exceeding 23% in the current year. However, the company remains a powerhouse in the industry and a pioneer in innovative medical technology.

Their dedication to research and development has resulted in a number of patented devices that provide a competitive edge and position them as a market leader. Despite short-term challenges, [Company B] continues to have strong long-term growth prospects.

In addition, growing global demand for high-end medical devices, along with the company's expanding international presence, makes [Company B] an attractive option for investors looking for a potential recovery opportunity.

While some healthcare stocks have had a rough ride this year, hawkish investors recognize the significant potential of these companies. [Company A], a biotech giant, and [Company B], a medical device maker, have seen declines of 23% or more this year. However, their strong fundamentals, impressive pipelines and commitment to innovation make them compelling investment options for those anticipating a recovery.

As with all investments, the risks and rewards must be carefully considered. Before making any investment decision, it is essential to do thorough research, consult with financial professionals and assess your risk tolerance. However, for those willing to face short-term volatility, the potential for significant returns in healthcare could prove very rewarding in the long run.

In the tumultuous world of stock markets, healthcare has seen its fair share of ups and downs. Despite a tough year for some healthcare stocks, there are promising opportunities for investors looking for a potential recovery. In this article, we'll examine two healthcare stocks that have fallen 23% or more this year and examine the factors that could lead to a potential rebound in their value.

Company A: Beacon of Innovation

Stock Symbol: [Ticker Symbol]

Year-to-date (YTD) performance: down 23%

Company A, a pioneering healthcare company, has been at the forefront of medical technology innovation. Despite the recent decline in the stock's value, several factors suggest that a potential recovery may be on the horizon:

a) Strong Channel: Company A boasts an impressive array of cutting-edge products and treatments set to revolutionize the healthcare industry. With upcoming regulatory approvals and product launches, there is potential for significant revenue growth.

b) Expansion into lucrative markets: The company has recently expanded its presence into high-growth markets, both domestically and internationally. This strategic move could lead to increased market share and higher profitability.

c) Positive earnings outlook: Company A has consistently demonstrated robust financial performance over the years. Despite the recent setback, its earnings outlook remains positive, making it an attractive choice for long-term investors.

d) Resilient leadership: The company is managed by a team of visionary leaders with a proven track record of handling challenging market conditions. Their ability to adapt and take advantage of opportunities could play a key role in potential population recovery.

Company B: A biotech giant on the verge of a breakthrough

Stock Symbol: [Ticker Symbol]

Year-to-date (YTD) performance: down 27%

Company B, a leading biotech firm, has seen its stock drop significantly this year. However, several factors suggest a rebound may be in the cards:

a) Breakthrough drug candidates: Company B has a number of promising drug candidates in advanced clinical trials. Positive test results and subsequent approvals could be the catalyst for a sharp rise in the company's share price.

b Potential acquisition: Industry experts speculate that Company B could be an acquisition target for larger pharmaceutical companies. Such a development could trigger a sharp increase in the value of the shares

c) Strong fundamentals: Despite the stock decline, Company B maintains strong fundamentals, including a healthy balance sheet and strong revenue streams. This could act as a safety net in challenging market conditions.

d) Favorable regulatory environment: Recent policy changes and supportive regulatory developments in the biotech industry may boost Company B's growth prospects and create a favorable environment for investors.

While investing in stocks always carries a degree of risk, the compelling attributes of Company A and Company B make them potentially attractive candidates for recovery. Investors should do their due diligence and consider their risk tolerance before making any investment decision. The potential for innovation and growth in the healthcare sector presents an exciting opportunity for those willing to take calculated risks in pursuit of returns.