3 Hidden Bargains in the Healthcare Sector

: VTRS | Viatris Inc. News, Ratings, and Charts

VTRS – Healthcare’s resilience makes it a go-to sector during market volatility. With steady demand, innovation, and aging demographics driving growth, investors could consider investing in fundamentally sound stocks like Viatris (VTRS), Bausch + Lomb Corp. (BLCO), and ACADIA Pharmaceuticals (ACAD). With strong industry tailwinds and discounted valuations, these stocks could offer solid upside potential. Continue reading….

Despite market volatility, the healthcare sector remains one of the most resilient industries, thanks to its non-cyclical nature and the rising demand for medical services. As the industry evolves, companies that innovate and adapt are well-positioned for growth, offering attractive investment opportunities.

For investors, now might be an opportune time to seek out bargain hunting for healthcare stocks with strong potential, such as Viatris Inc. (VTRS - Get Rating), Bausch + Lomb Corporation (BLCO - Get Rating), and ACADIA Pharmaceuticals Inc. (ACAD - Get Rating).

The healthcare landscape is undergoing a significant transformation with advancements in technology, evolving patient needs, and the growing complexity of medical treatments. Moreover, the aging population is increasing the need for long-term care, medical devices, and essential healthcare services.

At the same time, rising disposable income and changing lifestyles are driving higher healthcare spending, particularly on advanced treatments and pharmaceuticals. Meanwhile, hospitals are adopting bundled payment models and digital tools to enhance efficiency and cut costs.

With the global healthcare services market projected to grow by $6.26 trillion at a CAGR of 8.7% between 2023 and 2028, the sector’s expansion remains robust.

With that in mind, let’s examine the fundamental aspects of the above-mentioned stocks in detail:

Viatris Inc. (VTRS - Get Rating)

VTRS operates as a healthcare company internationally. The company operates through four segments: Developed Markets; Greater China; JANZ; and Emerging Markets. It provides prescription brand drugs, generic drugs, complex generic drugs, biosimilars, and active pharmaceutical ingredients (APIs).

In terms of the trailing-12-month EBITDA margin, VTRS’ 30.48% is 440.9% higher than the 5.64% industry average. Similarly, its 27.55% trailing-12-month levered FCF margin is considerably higher than the industry average of 2.57%. Also, its trailing-12-month ROTC of 3.08% compares favorably to the negative industry average of 19.20%.

The stock’s forward non-GAAP P/E multiple of 4.18x is 80.1% lower than the industry average of 20.97x. In addition, its forward EV/Sales ratio of 1.84x is 49.6% lower than the industry average of 3.66x.

During the third quarter that ended March 31, 2024, VTRS reported total revenues of $3.75 billion, and its adjusted gross profit was $2.19 billion with a margin of 58%. The company’s adjusted EBITDA amounted to $1.28 billion for the quarter. In addition, its adjusted net earnings and EPS stood at $897.60 million and $0.75, respectively.

Analysts expect VTRS’ EPS for the fourth quarter (ended December 2024) to come in at $0.57, while its revenue is expected to be $3.60 billion for the same period. However, VTRS’ shares have lost 2.3% over the past nine months to close the last trading session at $11.20.

VTRS’ bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.

The stock has an A grade for Value and a B for Growth. Among 149 stocks in the Medical – Pharmaceuticals industry, it is ranked #37. Click here to access additional ratings of VTRS for Momentum, Stability, Sentiment, and Quality.

Bausch + Lomb Corporation (BLCO - Get Rating)

BLCO operates as an eye health company with operations across the United States, Europe, Asia, and other international markets. It operates through three segments: Vision Care; Pharmaceuticals; and Surgical, offering a diverse portfolio of around 400 products, ranging from contact lenses and eye care solutions to ophthalmic pharmaceuticals and surgical instruments.

On January 13, 2025, BLCO announced that one of its affiliates had acquired Whitecap Biosciences, LLC, a company developing two novel therapies for glaucoma and geographic atrophy (GA). This acquisition reinforces the company’s commitment to expanding its clinical-stage pipeline and advancing innovative treatments in ophthalmology.

BLCO’s trailing-12-month EBIT and levered FCF margins of 4.04% and 2.93% are 65.4% and 13.8% higher than their respective industry averages of 2.44% and 2.57%. In addition, its trailing-12-month ROTC of 1.04% compares to the negative industry average of 19.20%.

In terms of forward EV/Sales, BLCO is trading at 2.20x, 39.8% lower than the industry average of 3.66x. Likewise, its forward EV/EBITDA multiple of 11.96x is 9.3% lower than the industry average of 13.19x.

For the third quarter of 2024, which ended on September 30, BLCO’s total revenue increased 19% year-over-year to $1.20 billion. Its operating income grew 7.5% from the year-ago value to $43 million. The company’s net income amounted to $4 million or $0.01 per share compared to a loss of $84 million or $0.24 per share from the prior-year quarter. Also, its adjusted EBITDA for the quarter came in at $212 million, up 13.4% year-over-year.

Street expects BLCO’s revenue for the fourth quarter (ended December 2024) to increase 6.9% year-over-year to $1.25 billion, while its EPS for the same period is expected to come in at $0.23. In addition, BLCO has topped the revenue and EPS estimates in each of the trailing four quarters, which is promising.

Over the past nine months, the stock has gained 20.2%, closing the last trading session at $17.41.

It’s no surprise that BLCO has an overall rating of B, equating to a Buy in our POWR Ratings system. It also has an A grade for Value and a B for Growth. Out of 132 stocks in the Medical – Devices & Equipment industry, it is ranked #34.

Beyond what is stated above, we’ve also rated BLCO for Momentum, Stability, Sentiment, and Quality. Get all BLCO ratings here.

ACADIA Pharmaceuticals Inc. (ACAD - Get Rating)

ACAD is a pharma company that focuses on CNS disorder treatments. Its key product is NUPLAZID for Parkinson’s disease psychosis. The company is also developing DAYBUE for Rett Syndrome and has several drugs in various trial phases for conditions like schizophrenia, Prader-Willi syndrome, Alzheimer’s disease psychosis, Rett syndrome, and Fragile X syndrome.

On December 11, 2024, ACAD finalized the sale of its Rare Pediatric Disease Priority Review Voucher (PRV) for $150 million before fees and expenses. As previously disclosed on November 5, 2024, Acadia will allocate one-third of the net proceeds to Neuren Pharmaceuticals Limited under their existing license agreement.

The company intends to use the remaining funds to support its commercial operations, advance R&D initiatives in the central nervous system and rare diseases, and explore future business development opportunities.

 ACAD’s trailing-12-month EBITDA margin of 13.40% is 137.8% higher than the industry average of 5.64%. Likewise, its trailing-12-month levered FCF margin of 23.86% compares to the industry average of 2.57%.

In terms of forward EV/Sales, ACAD is trading at 2.61x, 28.6% lower than the industry average of 3.66x. Similarly, its forward Price/Sales multiple of 3.14x is 15.5% lower than the industry average of 3.72x.

During the fiscal third quarter that ended September 30, 2024, ACAD’s total revenues increased 18.3% year-over-year to $250.40 million. Its income from operations amounted to $31.64 million, versus a loss of $57.78 million in the prior year’s quarter. Moreover, the company’s net income and EPS stood at $32.77 million and $0.20, compared to a net loss of $65.18 million and $0.40 per share, respectively.

Analysts expect ACAD’s revenue for the fourth quarter (ended December 2024) to increase 20.8% year-over-year to $279.21 million. The company’s revenue for the fiscal year 2025 is expected to grow 8.4% year-over-year to $1.06 billion. Moreover, the company topped the consensus revenue estimates in three of the trailing four quarters.

Shares of ACAD have gained 23.3% over the past three months to close the last trading session at $18.40.

ACAD’s robust fundamentals are apparent in its POWR Ratings. The stock has an overall rating of B, which equates to Buy in our proprietary rating system.

ACAD has an A grade for Value and Quality. Within the Medical – Pharmaceutical industry, it is ranked #35 out of 149 stocks. Click here to access additional ACAD ratings for Growth, Momentum, Stability, and Sentiment.

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VTRS shares were trading at $11.32 per share on Wednesday afternoon, up $0.12 (+1.07%). Year-to-date, VTRS has declined -9.08%, versus a 2.91% rise in the benchmark S&P 500 index during the same period.


About the Author: Shweta Kumari


Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
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BLCOGet RatingGet RatingGet Rating
ACADGet RatingGet RatingGet Rating

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