Personal health and wellness is one of the many secular tailwinds for healthcare companies. Shareholders who bet on the industry have been rewarded lately as healthcare stocks have returned 17.2% over the past six months, topping the S&P 500 by 7.1 percentage points.
Although these businesses have produced results, only a handful will thrive over the long term as the influx of venture capital has ushered in a new wave of competition. Taking that into account, here is one healthcare stock poised to generate sustainable market-beating returns and two we’re passing on.
Two Healthcare Stocks to Sell:
Corcept (CORT)
Market Cap: $3.68 billion
Focusing on the powerful stress hormone that affects everything from metabolism to immune function, Corcept Therapeutics (NASDAQ: CORT) develops and markets medications that modulate cortisol to treat endocrine disorders, cancer, and neurological diseases.
Why Are We Out on CORT?
- Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 24.7 percentage points
- Earnings per share fell by 6.5% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- 21.3 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
At $34.93 per share, Corcept trades at 54.6x forward P/E. Read our free research report to see why you should think twice about including CORT in your portfolio.
Viatris (VTRS)
Market Cap: $14.25 billion
Created through the 2020 merger of Mylan and Pfizer's Upjohn division, Viatris (NASDAQ: VTRS) is a healthcare company that develops, manufactures, and distributes branded and generic medicines across more than 165 countries worldwide.
Why Do We Avoid VTRS?
- Annual sales declines of 4.4% for the past two years show its products and services struggled to connect with the market during this cycle
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 13.1% annually while its revenue grew
- Negative returns on capital show management lost money while trying to expand the business, and its decreasing returns suggest its historical profit centers are aging
Viatris’s stock price of $12.26 implies a valuation ratio of 5.2x forward P/E. Check out our free in-depth research report to learn more about why VTRS doesn’t pass our bar.
One Healthcare Stock to Buy:
Oscar Health (OSCR)
Market Cap: $4.38 billion
Founded in 2012 to simplify the notoriously complex American healthcare system, Oscar Health (NYSE: OSCR) is a technology-focused health insurance company that offers individual and small group health plans through its cloud-native platform.
Why Is OSCR a Good Business?
- Annual revenue growth of 39.7% over the last two years was superb and indicates its market share increased during this cycle
- Earnings growth has trumped its peers over the last four years as its EPS has compounded at 30.3% annually
- Free cash flow margin expanded by 12.8 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
Oscar Health is trading at $16.64 per share, or 0.3x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today.
