QuidelOrtho Corporation: Examining a MedTech Stock
This analysis examines QuidelOrtho Corporation (NASDAQ:QDEL) within the context of the broader medical technology (MedTech) market, taking a look at its current standing and future potential according to analysts.
The Expanding Global MedTech Market
The MedTech sector is a cornerstone of modern healthcare, focused on creating medical devices designed to improve disease prevention, diagnosis, and treatment. This field encompasses an array of products, from familiar devices like pacemakers and imaging equipment to dialysis machines and various implants.
A scientist examining a medical diagnostic test.
According to a study by Mordor Intelligence, the medical equipment market was valued at $681.57 billion in 2023. Projections estimate a market value of $955.49 billion by the close of the forecast period, achieving a compound annual growth rate of 6.99% between 2025 and 2030. This expansion stems from several major shifts in the healthcare industry. One of the most significant is the aging global population. This is particularly true in developed nations like the United States, where 17% of the population was aged 65 or older as of 2023. The rising prevalence of chronic diseases also increases the demand for medical equipment.
The United Nations predicts that by 2050, the global population of individuals aged 65 and older will exceed 1.5 billion, accounting for about 16% of the world’s population. This demographic change is expected to be especially pronounced in regions like Europe and North America, where the percentage of those 65 and older could reach 26.9% by 2050.
Trends in Healthcare IT and Medical Devices
Technological advances are further transforming the healthcare IT sector, including the growing application of artificial intelligence (AI), advanced data analytics, and sophisticated algorithms. While North America currently holds the largest market share, Asia-Pacific is experiencing the most rapid growth in the medical device market.
Another analysis by Grand View Research projects that the U.S. medical device manufacturing market will reach approximately $256.2 billion by 2024. It is predicted to grow at a compound annual growth rate of 5.9% between 2025 and 2030. This growth is driven by factors such as the rising frequency of sports and traffic accidents, the aging population, the geographic expansion of key market players, and increased adoption of minimally invasive procedures.
McKinsey anticipates continued shifts in the healthcare sector’s growth dynamics. Revenue related to health services and technology (HST) is expected to expand at a compound annual growth rate of 8% between 2023 and 2028, fueled by double-digit growth in software platforms and data analytics. The selling of advanced technologies to payers and providers, such as generative AI, is also supporting this expansion.
Additionally, pharmaceutical services, particularly specialty pharmacy, are anticipated to continue growing. Increased utilization and the introduction of novel treatments are expected to drive this expansion. McKinsey projects that specialty pharmacy revenue will increase at a compound annual growth rate of 8% between 2023 and 2028, boosting the EBITDA of specialty pharmacies and similar service providers.
QuidelOrtho Corporation (QDEL)
QuidelOrtho Corporation (NASDAQ:QDEL) is a worldwide leader in in vitro diagnostics, developing pioneering tests for detecting infectious and chronic diseases. The company ranked sixth among the best medical technology stocks to buy according to analysts.
The company’s product portfolio includes point-of-care rapid tests, advanced transfusion medicine solutions, clinical laboratory diagnostics, and molecular platforms for swift pathogen identification, thereby ensuring a broad healthcare impact.
QuidelOrtho Corporation (QDEL)’s Q4 2024 financial report shows a company undergoing transitions. The company reported $708 million in revenue, a decline of 4% compared to the previous year. Adjusted EBITDA was $150 million, with margins around 21%, and adjusted diluted EPS was $0.633. During this period, COVID-19 and influenza-related revenue decreased, while the core lab business saw an increase of 4%. The company had a cash balance of $98 million at the close of the quarter.
QuidelOrtho Corporation (QDEL)’s recurring revenue model provides a degree of stability, with over 90% of their sales derived from reagents, consumables, and services. The corporation is focused on cost optimization, targeting $100 million in savings, which should bolster margins in 2025 and beyond. The company is also progressing its innovation pipeline, including clinical trials for the Savanna Respiratory Panel.
Looking forward, QuidelOrtho Corporation (QDEL) is positioned to capture a larger share of the growing diagnostics market. Analysts are optimistic that it has the potential for sustained long-term growth. The company’s guidance for 2025 revenue ranges from $2.60 billion to $2.81 billion, with a projected adjusted EBITDA of $575 million to $615 million.
