Growth-oriented stocks have faced serious headwinds lately, and the volatility may continue well into 2023. However, for investors in it for the long haul, great companies with clear paths to future growth abound, even in the current market.
If you have spare cash to put to work to build your portfolio right now, here are two fantastic growth stocks in the healthcare space that you may want to consider adding to your buy list before the end of January.
1. Vertex Pharmaceuticals
Vertex Pharmaceuticals (VRTX -1.02%) has largely eluded the trends driving the broader market over the last year. In fact, while the S&P 500 has delivered a negative return of 18% over the trailing 12 months, Vertex Pharmaceuticals boasts a trailing-12-month return of approximately 30%.
While healthcare stocks in general tend to be remarkably resilient in bear market periods, Vertex's continued success goes back to the strength of its core underlying business, which revolves around a portfolio of top-selling cystic fibrosis therapies. The company has grown its annual revenue and earnings by 150% and 12%, respectively, over the trailing five years alone, entirely due to the strength of the demand for its cystic fibrosis medicines. The genetic disease afflicts more than 100,000 people globally, and the numbers are growing.
One of the gamechangers in the fight against cystic fibrosis has been the introduction of a group of therapies known as CFTR modulators. These drugs actually work to help deal with the underlying cause of cystic fibrosis. Vertex s in the favorable position of having the only approved CFTR modulators on the market. The company's first-mover advantage continues to bolster its revenue and profits, which it is using to fund a highly promising pipeline of therapies targeting other rare diseases.
One example is a rare blood disorder treatment candidate called exa-cel, which it developed with CRISPR Therapeutics, and which could be close to receiving the green light from regulatory authorities in 2023. Its current pipeline also includes therapies targeting disease areas like pain disorders and diabetes. For investors searching for a powerhouse healthcare stock with a profitable, steadily growing business and abundant opportunity ahead as it taps into the growth potential of other key drug markets, Vertex Pharmaceuticals looks like a no-brainer buy right now.
2. Intuitive Surgical
For investors who aren't familiar, Intuitive Surgical (ISRG -0.55%) is the premier surgical robotics company on the planet. The company controls a whopping 80% share of the global surgical robotics market, and despite the entrance of new competitors to the space over the years, no one has even come close to snagging a notable chunk of Intuitive Surgical's sizable footprint.
The use of surgical robotics in minimally invasive surgeries is continuing to see mass and growing adoption from medical providers around the world. There are many reasons that these surgical systems can benefit both the patient and medical personnel involved in the procedure. For the patient, robot-assisted surgery can result in a shorter recovery time and even lower the risk of complications, not to mention offer enhanced precision for the doctor or medical team performing the procedure.
Intuitive Surgical's flagship product is the da Vinci surgical system. To date, the system has been used in more than 10 million procedures around the world and counting. As of the end of the last quarter, Intuitive Surgical had a base of 7,364 of these systems installed globally. Despite fluctuating procedure volumes in key markets due to COVID-19 resurgences, Intuitive Surgical's revenue rose 10% in the first nine months of 2022 to $4.6 billion. The company also reported net income just shy of $1 billion for the nine-month period.
While a spike in COVID-19 cases in key markets could continue to disrupt Intuitive Surgical's top and bottom lines in the near future, its systems are market-leading products that see steady demand. Usually, these procedures are not elective in nature, so procedure volumes should achieve a durable recovery in the future. Over the long term, whether or not a bull market appears in 2023, the continued adoption of surgical robotics systems by medical providers globally is also a key tailwind that Intuitive Surgical can tap into given its vast market footprint, and investors can reap the rewards.
