Is GE HealthCare Stock Underperforming the S&P 500?

With a market cap of $37.7 billion, GE HealthCare Technologies Inc. (GEHC) is a leading global provider of medical imaging, patient monitoring, and diagnostic products, services, and digital solutions. It operates through four key segments: Imaging, Advanced Visualization Solutions (AVS), Patient Care Solutions (PCS), and Pharmaceutical Diagnostics (PDx), serving healthcare providers worldwide.

Companies valued at $10 billion or more are generally considered “large-cap” stocks, and GE HealthCare fits this criterion perfectly. The Chicago, Illinois-based company generates roughly half of its revenue from equipment sales and the other half from consumables and services.

GE HealthCare's stock is down 12.9% from its 52-week high of $94.80. However, the medical technology company's shares have gained 7.1% in the past three months, outperforming the broader S&P 500 Index’s ($SPX) 6.2% decrease over the same time frame. 

In the longer term, GEHC stock is up 5.6% on a YTD basis, outpacing SPX’s 3.5% dip. Nevertheless, shares of GE HealthCare have declined 8.9% over the past 52 weeks, lagging behind the 10.9% return of the SPX over the same time frame.

Despite recent fluctuations, GEHC has risen above its 50-day and 200-day moving averages since January.

Despite weaker-than-expected Q4 2024 revenue of $5.3 billion, GE HealthCare shares surged 8.8% on Feb. 13, largely due to its strong adjusted EPS of $1.45, significantly beating the consensus estimate and rising 23% year-over-year. Profitability improvements also impressed investors, with the net income margin jumping to 13.5% and the adjusted EBIT margin increasing to 18.7%, driven by productivity gains and higher volumes. The Pharmaceutical Diagnostics segment stood out with 47% EBIT growth and 9% revenue growth. 

Additionally, upbeat 2025 guidance projecting 2% - 3% organic revenue growth and 3% - 6% adjusted EPS growth reassured investors.

However, GEHC has lagged behind its rival, Veeva Systems Inc. (VEEV), which has gained 3.2% over the past 52 weeks and 12.2% on a YTD basis.

Despite GEHC’s underperformance over the past year, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 18 analysts covering the stock, and as of writing, GEHC is trading below the mean price target of $101.33.