According to analysts, we've recently compiled a list of the 12 best healthcare stocks to buy. In this article, we will introduce Revolution Medicines, Inc. We'll see where (NASDAQ: RVMD) fights against other healthcare stocks.
McKinsey reported that since 2019, the US healthcare industry has witnessed significant financial pressure. This is evidenced by the fact that industry EBITDA as a percentage of national health spending has been reduced by an estimated 150 bps (base points). This fall has impacted payers and providers. In particular, the estimated payer margin for 2024 could be at the lowest level in a decade. Although providers face labor shortages, inflationary pressures are still not fully absorbed by the broader healthcare system.
Among these past trends, what does the future hold?
McKinsey believes healthcare professionals will need to consider potential policy and regulatory changes that could occur in the coming years as the 2025 change in federal administration. Furthermore, the industry continues to undergo a changing growth dynamic. Health Services and Technology (HST) revenue pool is projected to increase at a CAGR of 8% from 2023 to 2028. Providers and payers.
Furthermore, pharmacy services can see continuous growth, focusing primarily on specialized pharmacies. McKinsey said growth is expected to be driven by increased use and the launch of new treatments. In particular, specialist pharmacy revenue is projected to rise at 8% CAGR from 2023 to 2028, boosting specialty pharmacies and managed service providers EBITDA.
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McKinsey estimates Healthcare EBITDA is expected to increase by 7% CAGR in 2028 from a baseline of $676 billion in 2023. (such as HST and specialty pharmacies), growth is predicted to be faster. Software platforms play a key role in the healthcare ecosystem, enabling providers and payers to be more efficient in complex environments.
Technological innovations (such as generator AI and machine learning) continue to create opportunities for stakeholders across segments by automating workflows, driving data connectivity, and generating actionable insights. McKinsey further added that due to higher utilization and increased pipelines (such as oncology), specialized pharmacies revenues are expected to experience rapid growth. The increase in the use of specialist drugs continues to expand the profit pool of specialist pharmacies.
The story continues
Our Methodology
Analysts said they used screeners to list the 12 best healthcare stocks to buy and filtered out companies that cater to the healthcare sector. Next, we chose the stocks that analysts saw best. Finally, as of February 4th, stocks were placed in ascending order of average potential for a rise. As of the third quarter of 2024, he also mentioned the hedge fund sentiment regarding each stock.
At Insider Monkey, hedge funds are obsessed with stocks stacked on them. The reason is simple. Our research shows that mimic the top stock picks of the best hedge funds can outperform the market. The quarterly newsletter strategy has chosen 14 small and large caps per quarter, returning 275% since May 2014, breaking the benchmark by 150 percentage points (see more here).
It ponders test results and demonstrates the potential for a breakthrough in biotechnology.
Number of hedge fund holders: 44
Average upward likelihood: 64.9%
Revolution Medicines, Inc. (NASDAQ: RVMD) is a clinical-stage precision oncology company engaged in the development of new targeted therapies for RAS coagulation cancer. JP Morgan analyst Eric Joseph maintained the company's “buy” rating, increasing its price target to $71.00. Joseph's rating comes from a combination of factors that refer to the company's promising potential. In particular, Revolution Medicines, Inc. Recent data updates on the RAS(ON) pipeline of (NASDAQ:RVMD) have increased the success assumption of RMC-6236 drugs, primarily in second and first line non-small cell lung cancers (NSCLC) opportunities.
Furthermore, the increase in price targets is due to differences in ongoing clinical trials and the expectations of a robust commercial pathway for RMC-6236 as standard care for pancreatic ductal adenocarcinoma. Revolution Medicines, Inc. (NASDAQ: RVMD) continues to face competition, but it focuses on RAS inhibitors, with the differentiated safety profiles of some drug candidates well placed in the industry. Revolution Medicines, Inc. Given the current operating plans of (NASDAQ: RVMD), we expect current cash, cash equivalents and marketable securities to lend the planned business in 2027. , cash equivalents and marketable securities.
According to analysts, the overall RVMD ranks 8th in the list of the best healthcare stocks. Although we acknowledge the potential of RVMD as an investment, our belief is that some deeply undervalued AI stocks offer higher returns and greater returns within a shorter time frame. It lies in the belief that it holds a greater promise to bring. If you're looking for deep, undervalued AI stocks that are more promising than RVMD, but trade less than five times the revenue, check out our report on the cheapest AI stocks.
Read next: Buy 20 Best AI Stocks to Buy Now a List of AI Companies with Market Capitals under $2 billion.
Disclosure: None. This article was originally published on Insider Monkey.
