3 Healthcare Stocks to Avoid: GE HealthCare, Universal Health Services, and Revvity

Three healthcare stocks that are risky investments: GE HealthCare (GEHC), Universal Health Services (UHS), and Revvity (RVTY). GEHC has shown a lack of organic revenue growth, lower profitability, and a decline in free cash flow margin. UHS has struggled with poor comparable store sales performance and a decrease in adjusted operating margin. Revvity, formerly PerkinElmer, has experienced a decline in free cash flow margin and faces challenges in its health science technologies and services business.

Healthcare stocks have been a focus of investor attention due to their potential for growth and stability. However, not all healthcare stocks are created equal. This article examines three healthcare stocks—GE HealthCare (GEHC), Universal Health Services (UHS), and Revvity (RVTY)—that may present higher risks for investors.

GE HealthCare (GEHC)
GE HealthCare reported its second-quarter 2025 financial results, showing a 3% year-over-year (YoY) revenue growth, driven by strong performance in the U.S. and Europe, the Middle East, and Africa. However, organic revenue growth was only 2%, indicating a lack of organic demand. The company's net income margin increased to 9.7% from 8.9% in the prior year, but this was offset by a decline in adjusted EBIT margin to 14.6% from 15.3%. Free cash flow also improved but remains a concern, with $7 million in the second quarter compared to $(182) million in the prior year [1].

Universal Health Services (UHS)
Universal Health Services has faced challenges in recent quarters, with poor comparable store sales performance and a decrease in adjusted operating margin. The company reported a 1.6% decrease in adjusted operating margin to 1.5% for the second quarter 2025. This decline highlights operational inefficiencies and a challenging market environment for the company. The stock has been volatile, reflecting investor concerns about the company's ability to sustain profitability [2].

Revvity (RVTY)
Revvity, formerly known as PerkinElmer, has experienced a decline in free cash flow margin and faces challenges in its health science technologies and services business. The company reported a free cash flow margin of 1.5% in the second quarter 2025, down from 3.5% in the prior year. This decline underscores the company's struggle to generate cash flow from operations. Additionally, Revvity's health science technologies and services business has faced headwinds, impacting the company's overall performance [3].

Conclusion
While healthcare stocks offer potential for growth and stability, investors should be cautious when considering GE HealthCare, Universal Health Services, and Revvity. These companies have shown signs of weakness in organic revenue growth, profitability, and free cash flow, which may indicate higher risks for investors. It is crucial for investors to conduct thorough due diligence and consider the specific risks associated with each stock before making investment decisions.

References
[1] https://finance.yahoo.com/news/ge-healthcare-reports-second-quarter-102000129.html
[2] https://finance.yahoo.com/news/universal-health-services-102000128.html
[3] https://finance.yahoo.com/news/revvity-reports-second-quarter-102000127.html