Should You Buy Abbott Labs Stock Hand Over Fist Before July 16?

Abbott Laboratories (NYSE: ABT) reports second-quarter earnings on July 16, and some investors are trying to determine whether to buy the stock before the report is released or wait for the results.

But you can't make a proper determination about this without first understanding what drives Abbot's growth. So let's take a closer look.

The diversification factor

Unlike some healthcare companies that depend heavily on a single blockbuster product, Abbott operates across four major business segments: medical devices, diagnostics, nutrition, and established pharmaceuticals. That diversification has helped the company remain resilient through changing healthcare and economic environments for nearly 50 years.

Now the company's largest growth engine is its medical device business. During Q1, medical device revenue reached approximately $5.5 billion, accounting for roughly half of Abbott's total sales. Within that segment, diabetes care continues to stand out.

Abbott's FreeStyle Libre continuous glucose monitoring platform generated roughly $2 billion in quarterly sales. Libre has become one of the most widely used glucose-monitoring systems in the world, with more than 7 million users across over 60 countries. This is not insignificant as diabetes remains one of the fastest-growing chronic diseases globally.

The International Diabetes Federation's data indicate more than 589 million adults worldwide are currently living with diabetes, a figure expected to exceed 850 million by 2050. As adoption of continuous glucose monitoring technology expands, Abbott has a significant opportunity to continue growing this franchise.

Heart repair sales are increasing

Abbot's cardiovascular business is also contributing, with its structural heart segment generating roughly $578 million in Q1 revenue. Products such as MitraClip and TriClip are helping the company capture a growing share of the minimally invasive heart repair market, which analysts expect to expand significantly over the next decade as populations age.

Image source: Getty Images.

Beyond devices, Abbott also continues to generate steady revenue from diagnostics and nutrition. Its diagnostics segment produced approximately $2.1 billion in Q1 sales, while nutrition generated about $2 billion. Brands such as Ensure, Glucerna, Pedialyte, and Similac continue providing recurring revenue streams that help offset fluctuations elsewhere in the business.

What to watch for on July 16

First, FreeStyle Libre growth will likely be front and center. The platform has become one of Abbott's most important products, and you'll want to see whether sales growth remains above 20%. Because if that growth rate begins to slow, investors may start questioning how much longer Abbott can rely on its diabetes care business to drive overall revenue and earnings growth. I'm not particularly concerned about it, but it would be foolish to ignore this possibility, however small it may be.

Second, updates on the company's cardiovascular device portfolio could be important. Abbott has invested heavily in structural heart technologies, and continued adoption of these products could support years of future growth. Third, pay close attention to guidance.

Management's outlook for the remainder of 2026 may ultimately matter more than whether the company beats quarterly estimates by a few cents. While a small earnings beat might move the stock temporarily, changes to full-year guidance can signal whether growth in key businesses like FreeStyle Libre and cardiovascular devices is accelerating or slowing, which has a much bigger impact on the company's long-term value.

Competition remains intense

While Abbott is no slouch, it still faces stiff competition. DexCom continues to compete aggressively in continuous glucose monitoring, while a number of other medical device companies are pursuing opportunities in cardiovascular care and diagnostics.

Still, Abbott's strengths are difficult to ignore. The company has increased its dividend for more than 50 consecutive years, making it a member of the Dividend Kings. It generated nearly $9.57 billion in free cash flow during 2025 and maintains one of the strongest balance sheets in the healthcare sector. That's why focusing too heavily on a single earnings report may be missing the bigger picture.

Could the stock move after July 16? Absolutely. Earnings surprises often create short-term volatility. But Abbott's long-term investment case isn't built on one quarter. It's built on a diversified healthcare business, a market-leading diabetes franchise, growing cardiovascular device sales, and the financial resources to continue investing in innovation.

If you're in it for the long haul, those factors are probably more important than whatever happens on July 16.

Jeff Siegel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Abbott Laboratories. The Motley Fool recommends DexCom and recommends the following options: long January 2027 $65 calls on DexCom and short January 2027 $75 calls on DexCom. The Motley Fool has a disclosure policy.