Healthcare companies are pushing the status quo by innovating in areas like drug development and digital health. Shareholders who bet on the industry have been rewarded lately as healthcare stocks have returned 25.1% over the past six months, topping the S&P 500 by 13.1 percentage points.
Regardless of these results, investors must exercise caution as many businesses in this space are subject to heavy regulation that can influence their earnings potential. Taking that into account, here is one resilient healthcare stock at the top of our wish list and two that may face trouble.
Two Healthcare Stocks to Sell:
Dentsply Sirona (XRAY)
Market Cap: $2.25 billion
With roots dating back to 1877 when it introduced the first dental electric drill, Dentsply Sirona (NASDAQ: XRAY) manufactures and sells professional dental equipment, technologies, and consumable products used by dentists and specialists worldwide.
Why Is XRAY Risky?
- Constant currency growth was below our standards over the past two years, suggesting it might need to invest in product improvements to get back on track
- Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 13.6% annually, worse than its revenue
- Negative returns on capital show management lost money while trying to expand the business, and its falling returns suggest its earlier profit pools are drying up
Dentsply Sirona’s stock price of $11.30 implies a valuation ratio of 7.3x forward P/E. If you’re considering XRAY for your portfolio, see our FREE research report to learn more.
Novavax (NVAX)
Market Cap: $1.70 billion
Pioneering a nanoparticle technology that mimics the molecular structure of disease pathogens, Novavax (NASDAQ: NVAX) develops and commercializes protein-based vaccines for infectious diseases, with a primary focus on its COVID-19 vaccine and combination respiratory vaccine candidates.
Why Do We Avoid NVAX?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 18.9% annually over the last five years
- Inability to adjust its cost structure while its revenue declined over the last two years led to a 26.9 percentage point drop in the company’s adjusted operating margin
- Cash-burning history makes us doubt the long-term viability of its business model
At $10.32 per share, Novavax trades at 6.9x forward price-to-sales. To fully understand why you should be careful with NVAX, check out our full research report (it’s free).
One Healthcare Stock to Watch:
Molina Healthcare (MOH)
Market Cap: $10.55 billion
Founded in 1980 as a provider for underserved communities in Southern California, Molina Healthcare (NYSE: MOH) provides managed healthcare services primarily to low-income individuals through Medicaid, Medicare, and Marketplace insurance programs across 21 states.
Why Is MOH on Our Radar?
- Annual revenue growth of 13.7% over the last five years beat the sector average and underscores the unique value of its offerings
- Sizeable revenue base of $44.52 billion gives it economies of scale and favorable reimbursement terms with healthcare providers
Molina Healthcare is trading at $203.76 per share, or 29x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
