Replies to post #856 on ReWalk Robotics Ltd (RWLK)

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Future Outlook Of The Healthcare Industry And ReWalk Robotics Ltd (NASDAQ:RWLK)

 Simply Wall St  August 9, 2018

ReWalk Robotics Ltd (NASDAQ:RWLK), a US$27.70m small-cap, operates in the healthcare industry, which faces key trends such as rising demand fuelled by an aging population and the growing prevalence of chronic diseases. Moreover, the challenges facing the healthcare equipment in particular, are complex and interrelated. Therefore, care delivery approaches that are holistic and technology-enabled are more likely to result in positive outcomes in the long run. Healthcare analysts are forecasting for the entire industry, a strong double-digit growth of 19.23% in the upcoming year , and a whopping growth of 45.69% over the next couple of years. This rate is larger than the growth rate of the US stock market as a whole. Is the healthcare industry an attractive sector-play right now? In this article, I’ll take you through the sector growth expectations, as well as evaluate whether ReWalk Robotics is lagging or leading its competitors in the industry.

Check out our latest analysis for ReWalk Robotics

What’s the catalyst for ReWalk Robotics’s sector growth?NasdaqCM:RWLK Past Future Earnings August 8th 18

Personalized and data-driven equipment underpins the future advancement and structural shift in the healthcare equipment industry. In the previous year, the industry saw growth of 8.93%, though still underperforming the wider US stock market. ReWalk Robotics leads the pack with its impressive earnings growth of 22.94% over the past year. However, analysts are not expecting this industry-beating trend to continue, with future growth expected to be 14.07% compared to the wider healthcare equipment sector growth hovering in the teens next year. This growth is a median of profitable companies of 25 Medical Equipment companies in US including Cardiovascular Systems, Lantheus Holdings and Cutera. As a future industry laggard in growth, ReWalk Robotics may be a cheaper stock relative to its peers.

Is ReWalk Robotics and the sector relatively cheap?

Healthcare companies are typically trading at a PE of 39.71x, higher than the rest of the US stock market PE of 18.44x. This means the industry, on average, is relatively overvalued compared to the wider market. However, the industry returned a similar 12.85% on equities compared to the market’s 11.38%. Since ReWalk Robotics’s earnings doesn’t seem to reflect its true value, its PE ratio isn’t very useful. A loose alternative to gauge ReWalk Robotics’s value is to assume the stock should be relatively in-line with its industry.

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