There is a difference between the FDA saying no and the FDA saying later, and share prices frequently treat them as the same event. One cancer drug maker just got the “later” version.
Stay with this, and you will understand why this year’s revenue forecast does not change at all.
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Healthcare
Smith & Nephew Trades Near 12x Forward Earnings as Newer Devices Gain Ground
Smith & Nephew plc (NYSE: SNN) is showing improving profitability even as management has lowered its near-term growth expectations.
The medical-device maker operates across orthopedics, sports medicine, and advanced wound management.
First-half trading profit rose faster than revenue, while adjusted EPS also advanced. Management reduced its 2026 underlying revenue-growth target to around 4%, but kept its outlook for stronger trading-profit growth and substantial free cash flow.
Newer Products Could Shift the Growth Mix
Smith & Nephew is seeing strong growth from newer platforms including REGENETEN, FASTSEAL, CATALYSTEM, and Q-FIX. Sports Medicine remains a bright spot, while U.S. orthopedics has started showing improvement.
If these products continue gaining share, they could help offset slower growth elsewhere and give margins another lift as efficiency measures take hold.
The Growth Reset Still Matters
Underlying growth remained modest in the first half, while free cash flow was pressured by spending on a new U.K. wound facility and technology upgrades.
The valuation leaves some room for improvement, but the next step depends on turning product momentum into broader organic growth without sacrificing cash generation.
Insurance
Slide Insurance Keeps Growing as Underwriting Results Strengthen
Slide Insurance Holdings, Inc. (NASDAQ: SLDE) continues expanding premiums while producing substantially better underwriting results.
The insurer's latest quarter showed strong revenue and earnings growth, alongside a sharp improvement in its combined ratio.
Management maintained its full-year outlook for continued premium growth and substantial net income. The company is also expanding outside Florida, giving its growth strategy a broader base.
Underwriting Is Doing the Heavy Lifting
Slide is generating more profit from the policies it already writes, rather than relying solely on premium growth. The improvement in its combined ratio shows the effect of better claims and expense performance.
The company also repurchased shares during the quarter and initiated a quarterly dividend, adding another potential source of per-share earnings growth.
Catastrophe Exposure Remains the Main Variable
Insurance results can change quickly when claims rise, particularly with significant exposure to Florida homeowners. Strong recent underwriting therefore cannot simply be carried forward indefinitely.
Slide still needs to balance expansion with underwriting discipline, particularly as it grows into additional markets and takes on new policy exposure.
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Dental
Envista Trades Near 15x Forward Earnings After Raising Its Outlook
Envista Holdings Corporation (NYSE: NVST) has raised its 2026 outlook as improving margins translate modest sales growth into faster earnings growth. The dental-products company trades at roughly 15 times the midpoint of its adjusted EPS guidance.
Second-quarter sales grew on a core basis, while adjusted EBITDA increased substantially and free cash flow improved from the prior year.
Management now expects continued core sales growth, double-digit EBITDA growth, and roughly full conversion of earnings into free cash flow.
Margin Expansion Is Changing the Earnings Equation
Envista does not need rapid revenue growth to produce faster earnings growth. The latest quarter showed how operational improvements can amplify modest sales gains and expand profitability.
The company is also returning capital through share repurchases, giving stronger cash generation another route to improving per-share results.
The Market Still Wants Proof
The discount reflects lingering questions around Envista's medium-term growth and M&A strategy. Management therefore needs to keep converting sales gains into higher margins and consistent cash flow.
If the improved earnings outlook holds, the company's operating progress could become increasingly visible in its valuation.
Actionable Picks This Week
Exelixis (NASDAQ: EXEL)
Exelixis sells cancer drugs, and one of them, Cabometyx, is approved and generating enough revenue to fund the entire company. A second drug aimed at colorectal cancer is waiting on the FDA, and two things went wrong at once.
The trial worked in the broader patient group but fell short in one narrower subgroup; then the FDA asked for more data and pushed its decision to March 2027. The stock sold off like the drug had been rejected. It has not been.
And this year’s revenue forecast never assumed approval in the first place, so the numbers you are buying have not moved.
Warby Parker (NYSE: WRBY)
Warby Parker sells glasses, originally online and now increasingly through its own stores. That shift is the whole story, because plenty of internet brands open physical locations and quietly discover the economics do not work. This one keeps opening them anyway.
Fifteen net new stores went up last quarter, taking the total past 350, and management reaffirmed plans for fifty new locations this year. Revenue grew close to ten percent with the customer base up around four.
It is not profitable at scale yet, which is the catch. The holiday quarter is the test.
Universal Display (NASDAQ: OLED)
Every OLED screen in your phone or television needs specific chemicals to make the pixels glow, and this company owns the patents on the ones everybody uses. Display makers pay it a license fee.
The stock has been pulled apart over the past year and sits only a few percent above its 52-week low, with the top of that range roughly double where it trades now.
The worry is that customers push back on pricing or find alternative chemistry. Fair concern. Against it, you get two decades of patents, a dividend, and new formats like foldables that need more of this material rather than less.
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Fast Movers to Watch
Ultra Clean Holdings (NASDAQ: UCTT) The machines that manufacture computer chips are enormously complex, and this company builds parts and subsystems that go inside them.
That makes it a direct bet on how much the big chip equipment makers are spending. It got cut roughly in half over the summer before climbing back above its 200-day average, which usually signals that sellers have finally cleared out.
The next earnings report tells you whether chip equipment spending is genuinely recovering or just bouncing.BILL Holdings (NYSE: BILL) BILL handles the boring part of running a small business, paying supplier invoices and chasing customer payments without anyone doing it by hand.
Roughly 479,000 businesses use it, payment volume grew fourteen percent last quarter to about $98 billion, and core revenue rose sixteen percent for the year.
That is a company growing, which sits oddly against how the shares have traded. Software this deeply wired into how a business pays its bills is genuinely painful to rip out.GoodRx (NASDAQ: GDRX) If you have ever paid for a prescription and been surprised by the price, GoodRx is the app that finds you a cheaper one at a different pharmacy.
It takes a cut of the transaction. Drug prices have gone up reliably for decades, which is the entire reason this business exists.
It recently launched a subscription plan covering whole households and pets, which turns occasional coupon use into recurring monthly revenue. Smallest and riskiest name here, so size it accordingly.
Which "cheap" sector is cheap for a good reason?
Everything Else
Netflix fell about 4.7% after Wells Fargo cut it to underweight, citing weaker viewer engagement and a thinner slate of upcoming shows.
Steelmakers Nucor and Steel Dynamics both told investors to expect lower third-quarter profits than Wall Street had forecast.
Generac shares jumped after Amazon agreed to buy $2.4 billion of its backup generators for data centers and received warrants on 1.7 million shares.
Homebuilder Lennar cut its full-year target to around 80,000 homes from 83,000 as new orders fell nine percent.
Nike added Alexandre Arnault, who runs Moët Hennessy day-to-day, to its board of directors.
That's our coverage for today; thanks for reading! Reply to this email with feedback or any stocks you want me to check out.
Best Regards,
—Noah Zelvis
Undervalued Edge
