If you're looking for stocks that can deliver explosive gains, the healthcare sector has you covered, Doximity (DOCS -0.77%), TransMedics (TMDX -3.53%) , and InMode (INMD 0.40%) are leading the niche markets where they earn a living, but the stock market doesn't seem to appreciate their strengths.
Large available markets and a lack of competition make these great growth stocks to buy now and hold over the long run. Read on to see how they could explode higher in 2023 and continue outperforming over time.
1. Doximity
Doximity runs a semi-exclusive social media platform for U.S. healthcare professionals, and its membership roster includes over 80% of all U.S. physicians. Comments are welcome, but members aren't allowed to upload their own posts.
High penetration among the medical community and a lack of problematic personal content make Doximity's social media feed a dream come true for advertisers. The company also leverages its popularity to launch productivity applications that health systems are increasingly willing to pay for.
In recent earnings reports, social media giant Meta Platforms reported declining ad revenue, but not Doximity. Despite being in a difficult period for businesses that rely on advertising, Doximity reported third-quarter sales that soared 29% year over year.
Investors will be glad to know Doximity is already strongly profitable. During the six-month period that ended on Sep. 30, the company earned $48.7 million, which works out to an impressive 24% of total revenue.
2. TransMedics
TransMedics is quickly changing the way hospitals preserve transplantable organs for the better. The stock more than tripled in 2022, and this could be another big year. The company markets an organ care system (OCS) that's approved to keep hearts, lungs, and livers fresh by pumping them full of oxygenated blood.
In 2021, there were 13,863 deceased organ donors in the U.S., but 10,205 of the donated hearts that year went unutilized. TransMedics' OCS is improving these figures dramatically. During the Expand trial, 81% of hearts kept in a TransMedics OCS were utilized for transplants.
In addition to organ preservation, the TransMedics OCS manages organ retrieval, transportation, and logistics. Transplant centers appear willing to pay for the comprehensive service. The company reported third-quarter sales that rocketed 25% higher than the previous quarter and 378% compared to the previous year's period.
3. InMode
InMode is a medical device maker that is quickly sewing up the market for minimally invasive cosmetic procedures. This company markets a wide range of devices that sculpt, contour, and smooth out wrinkled skin using proprietary technology.
The company recently reported unaudited 2022 sales figures that reached between $453.9 million and $454.1 million, or just a tiny sliver of its total addressable market. According to Grandview Research, the global market for cosmetic surgery and procedures reached a stunning $63.4 billion in 2021, and it's expected to climb by 9.6% annually through 2030.
InMode is steadily gaining a share of the cosmetic procedure market. In the third quarter of 2022, total sales jumped 27% higher year over year, but this doesn't tell the whole picture. Sales of services and consumable goods that must be replaced before each procedure soared 78% year over year.
Despite sales that are growing by leaps and bounds, the market isn't expecting much from InMode. The stock's trading at just 12.4 times forward-looking earnings estimates. Scooping up shares now and holding them over the long run could do wonders for your portfolio.
