3 Robotics Stocks Powering the Automation Revolution
The robotics market is at the forefront of the automation revolution, fueled by rapid advancements in artificial intelligence (AI), machine learning, collaborative robots, enhanced safety features, and autonomous systems. These innovations are not just reshaping the landscape of various industries, including air defense and medical technology (MedTech), but also presenting lucrative investment opportunities. With the global robotics market poised to grow significantly, let’s dive into three strong robotics stocks leading this transformative charge: RTX Corporation (RTX), Stryker Corporation (SYK), and Medtronic plc (MDT).
Robotics: The Future of Air Defense and Healthcare
The application of robotics and AI in air defense has decentralized military operations, improving soldier training, enhancing aerial vehicle capabilities (UAVs), and ensuring better logistics that bolster combat effectiveness and cybersecurity. Enhanced drone technologies and autonomous systems are making defense mechanisms more agile. This trend paints a positive outlook for the robotics sector amid growing demands for security and combat readiness.
On the healthcare front, robotics is revolutionizing patient care. The integration of surgical robotics is enabling more precise surgeries, expediting diagnoses, and enhancing rehabilitation processes, while telemedicine improves accessibility. The global medical service robotics market has surged this year to reach $11.2 billion and is projected to nearly double to $21 billion by 2028. With these advancements in mind, let’s examine the fundamentals and chart signals of the leading robotics stocks.
RTX Corporation (RTX)
RTX operates in aerospace and defense, providing systems and services to an array of civilian and military clients. Recently, on October 15, 2024, its Raytheon division achieved full-rate production approval for the SM-3 Block IIA missile, marking a significant step forward in its defense collaboration with Japan. Moreover, an important financial boost came with a $736 million U.S. Navy contract awarded for the production of AIM-9X Sidewinder missiles on October 10, 2024.
RTX has demonstrated impressive financial metrics with a trailing-12-month levered free cash flow (FCF) margin of 12.99%, significantly above the industry average of 6.55%. The company’s sales grew 7.7% year-over-year in the second quarter, reaching $19.72 billion, while adjusted net income remained stable at $1.90 billion. Going forward, analysts anticipate EPS growth of 7.1% and revenue growth of 47.2% for the quarter ending September 30, 2024.
Over the past year, RTX shares have surged by 70.2%, closing the last trading session at $125.75. The stock holds a B rating in our POWR Ratings, ranked #19 out of 73 in the Air/Defense Services sector, reflecting solid fundamentals.
Stryker Corporation (SYK)
Stryker is a beacon in the medical technology space, operating across segments such as MedSurg, Neurotechnology, and Orthopedics. Most recently, on October 1, 2024, Stryker completed its acquisition of Vertos Medical, expanding its solutions for chronic lower back pain with enhanced non-surgical offerings.
In terms of financial health, Stryker boasts a trailing-12-month EBIT margin of 20.71%, vastly exceeding the industry average of 2.66%. Its recent quarterly results were promising, showcasing an 8.5% year-over-year increase in net sales to $5.42 billion. Analysts expect further expansion with EPS and revenue projected to increase by 12.7% and 9.5% year-on-year, respectively, for the September quarter.
Stryker shares have advanced by 33.8% over the last year, recently closing at $359.73. The stock earns a B rating in our POWR Ratings, ranked #30 within the Medical Devices & Equipment industry.
Medtronic plc (MDT)
Based in Dublin, Medtronic is a leader in device-based medical therapies. The company is pioneering advancements in spine surgery technology, having launched the AiBLE ecosystem, and announced strategic partnerships to further imaging solutions.
Medtronic’s fundamentals are striking, showcasing a trailing-12-month gross profit margin of 65.52%, and an EBITDA margin of 27.67%, both significantly above the industry averages. With net sales hitting $7.92 billion for its first quarter, and expected revenue growth to $8.28 billion, Medtronic is solidifying its market position. The stock has seen a 23.3% gain over the past year, closing last at $89.79.
Medtronic has a B rating in our POWR Ratings and has consistently outperformed EPS estimates. This stock ranks favorably among its peers, poised for further gains as the healthcare robotics narrative unfolds.
Conclusion: Investing in Robotics
The robotics sector is not merely a fleeting trend; it’s a sustainable shift that investors should not overlook. With stocks like RTX, SYK, and MDT driving this innovation, there are clear opportunities on the horizon. Each of these companies shows robust growth indicators and significant investment potential. As you consider your trading strategies, keep an eye on these powerhouses in the automation revolution!
