Over the last six months, ICU Medical’s shares have sunk to $136.25, producing a disappointing 14.9% loss while the S&P 500 was flat. This may have investors wondering how to approach the situation.
Is now the time to buy ICU Medical, or should you be careful about including it in your portfolio? Dive into our full research report to see our analyst team’s opinion, it’s free.
Why Do We Think ICU Medical Will Underperform?
Even though the stock has become cheaper, we don't have much confidence in ICU Medical. Here are three reasons why you should be careful with ICUI and a stock we'd rather own.
1. Lackluster Revenue Growth
Long-term growth is the most important, but within healthcare, a stretched historical view may miss new innovations or demand cycles. ICU Medical’s recent performance shows its demand has slowed as its annualized revenue growth of 2.2% over the last two years was below its five-year trend.
2. Revenue Projections Show Stormy Skies Ahead
Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.
Over the next 12 months, sell-side analysts expect ICU Medical’s revenue to drop by 12.3%, a decrease from its 14.6% annualized growth for the past five years. This projection is underwhelming and suggests its products and services will face some demand challenges.
3. EPS Trending Down
Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.
Sadly for ICU Medical, its EPS declined by 1.1% annually over the last five years while its revenue grew by 14.6%. This tells us the company became less profitable on a per-share basis as it expanded.
Final Judgment
We cheer for all companies serving everyday consumers, but in the case of ICU Medical, we’ll be cheering from the sidelines. Following the recent decline, the stock trades at 18.9× forward P/E (or $136.25 per share). This valuation tells us a lot of optimism is priced in - you can find better investment opportunities elsewhere. We’d suggest looking at a top digital advertising platform riding the creator economy.
Stocks We Like More Than ICU Medical
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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.
