3 Medical Info Systems Stocks to Buy as Stargate AI Drives Industry Prospects

Core Insights - The Medical Info Systems industry is rapidly expanding, driven by advancements in AI and telemedicine, with significant growth expected by 2025 due to new federal policies and projects like Trump's $500 billion Stargate initiative [1][4]. Industry Overview - The Zacks Medical Info Systems industry includes companies that develop healthcare information systems, providing software and hardware solutions for real-time access to clinical, administrative, and financial data [3]. - Key players like Omnicell and Allscripts are generating substantial revenue from software sales, IT outsourcing, and maintenance contracts [3]. Market Trends - The medical device market is projected to grow at a CAGR of 29.9% from 2026 to 2029, driven by a patient-centric approach and increasing healthcare expenditure [2]. - The global AI in healthcare market is expected to reach $95.65 billion by 2025, enhancing diagnostics and patient monitoring through AI-powered tools [4]. - The smart healthcare products market was valued at $145.9 billion in 2023 and is anticipated to grow to $485.71 billion by 2032, at a CAGR of 12.78% [5]. Cybersecurity Concerns - The increasing interconnectivity of healthcare systems has raised cybersecurity risks, with notable incidents affecting companies like Henry Schein and Change Healthcare [6]. Industry Performance - The Zacks Medical Info Systems industry has underperformed the S&P 500 and the broader medical sector over the past year, with a decline of 6.6% compared to the sector's 4.4% drop [9]. Valuation Metrics - The industry is currently trading at a forward price-to-sales ratio of 5.63X, compared to the S&P 500's 5.51X and the sector's 2.86X [11]. Company Highlights - Enovis: A medical technology company with a Zacks Rank 2 (Buy), expected to see a 16.3% earnings improvement in 2024 and 14.3% growth in 2025 [14][15]. - Omnicell: Also holding a Zacks Rank 2, targeting revenues of $1.9 billion to $2 billion by 2025, with a CAGR of 14%-15% from 2021 to 2025 [17][18]. - Phreesia: Provides a SaaS-based platform, enabling approximately 150 million patient visits in 2023, with a Zacks Rank 2 and a projected 56.2% earnings improvement in 2024 [20][21].