2 MedTech Stocks That Are Screaming Buys in January

At the intersection of healthcare and technology, medtech companies are leveraging innovative solutions to improve patient care and health outcomes. Industry leaders are well-positioned to deliver shareholder value by addressing the growing healthcare demands of an aging global population and the rising prevalence of chronic diseases. Recent breakthroughs in artificial intelligence (AI) and robotics have unlocked new growth opportunities, further supporting a robust long-term outlook.

Here are two fantastic MedTech stocks that could be great buys this month.

Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »

Image source: Getty Images.

1. Medtronic

Medtronic (NYSE: MDT) is one of the world's largest medical-device companies, pioneering technologies from cardiac pacemakers to minimally invasive surgical tools. The company continues this legacy of innovation through four core operating segments spanning cardiovascular, neuroscience, medical-surgical, and diabetes care.

A major theme for Medtronic is its embrace of artificial intelligence capabilities, integrating machine learning into cutting-edge use cases. The GI Genius intelligent endoscopy module pioneered AI-powered polyp detection during colonoscopies, while the AiBLE surgical ecosystem employs predictive models to create patient-specific plans for spine and cranial procedures.

In diabetes care, the MiniMed 780G insulin pump system uses AI algorithms to predict and adjust insulin delivery based on real-time blood sugar monitoring. These types of features highlight just some of the growth drivers for Medtronic in 2025.

In its fiscal 2025's second quarter (ended Oct. 25, 2024), revenue climbed by 5.3%, while adjusted earnings per share (EPS) increased by 8% in constant-currency terms, compared to last year. Medtronic management projected optimism by hiking its full-year organic revenue growth and adjusted EPS forecast, targeting a range of around 5% for both metrics, compared to 2024.

Even as these headline numbers don't necessarily jump out as exceptional, the trends are building a foundation for even stronger momentum, based on several new-product launches over the past year. Indeed, Medtronic has received more than 120 product approvals from different regulatory agencies worldwide, many of which are still in the early stages of reaching their market-adoption potential.

Medtronic's diversified portfolio across high-growth healthcare markets, combined with strong fundamentals, presents a compelling long-term investment. With shares trading 13% below their 52-week high and offering a 3.3% dividend yield, investors have an attractive entry point into this medtech leader.

Image source: Medtronic

2. Transmedics Group

TransMedics Group (NASDAQ: TMDX) commercializes the first and only Food and Drug Administration (FDA) approved medical device for heart, lung, and liver transplantation in the United States to extend organ preservation time. Unlike conventional cold-storage methods, the TransMedics Organ Care System (OCS) keeps donor organs in a human-like metabolically active state, increasing the chances of successful transplantation.

The trends have been impressive. TransMedics expects to more than triple its U.S. transplant cases from 1,000 in 2022 to an estimated 3,600 in 2024, while targeting 10,000 OCS transplants annually by 2028.

Image source: TransMedics Group.

This momentum drove a 330% stock return over the past five years, although shares have recently pulled back 50% from their 52-week high following revised guidance and a management shake-up announced in December.

Despite near-term volatility, the company's fundamentals remain strong. TransMedics projects a still spectacular 77%-79% revenue growth rate for 2024, only slightly below previous estimates of 76%-84%. Notably, TransMedics has achieved profitability this year, with analysts forecasting further EPS gains in 2025 and beyond.

The bullish case for the stock is that the OCS continues to gain market share, evolving as the transplant-industry standard. Investors have several catalysts to look forward to now, including the company's launch of a next-generation heart and lung OCS device alongside an ongoing effort to expand internationally.

Ultimately, I believe the recent sell-off represents a compelling buying opportunity for an industry leader with long-term growth potential that remains intact. A solid fourth-quarter update could be the catalyst needed for the stock to rebound sharply higher.

The big picture for investors

Medtronic and Transmedics represent two distinct approaches to capitalizing on healthcare's technological transformation. Medtronic offers steady growth through its diversified portfolio and consistent dividend income, while Transmedics drives higher growth by revolutionizing the organ-transplant field. For investors seeking MedTech exposure, these two industry leaders have all the pieces in place to deliver positive shareholder returns in the years ahead.

Should you invest $1,000 in Medtronic right now?

Before you buy stock in Medtronic, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Medtronic wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $858,668!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of January 6, 2025

Dan Victor has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends TransMedics Group. The Motley Fool recommends Medtronic and recommends the following options: long January 2026 $75 calls on Medtronic and short January 2026 $85 calls on Medtronic. The Motley Fool has a disclosure policy.