Penumbra (PEN): A Medical Device Stock Worth Watching

Medical device stocks are an interesting case. Within this niche, wearables looked like a trend for a minute thair — but so far, they’ve failed to live up to the hype. At the same time, the industry at large faces concern regarding supply chains and tariffs.

Perhaps that’s why the industry has an overall C (Average) rating according to our Zen Ratings model.

It’s also a compelling reason to look at a less buzz-worthy yet still high-potential side of the industry: Medical device companies that focus on the tools and products used in hospitals and clinics. 

Penumbra (NYSE: PEN) is one such company — on top of that, it’s also resistant to tariff concerns, as most of its manufacturing is in the United States. While it does rely on several foreign importers (not all, mind you), the consensus is that the business maintains a rather robust and diverse supply chain. It’s also currently the 7th highest rated stock in its industry.

At present, PEN stock carries an overall Zen Rating of A. Stocks of this caliber have provided an average annual return of 32.52% since the turn of the century. 

To be more precise, a holistic analysis of 115 factors, divided into 7 Component Grade ratings, has given Penumbra shares the highest possible rating, placing them in the top 3% of the more than 4,600 stocks that we track.

For a better idea of why the Zen Ratings system rates it so highly, we have to look at those Component Grade ratings.

Obviously, there’s plenty to like here — so let’s take it from top to bottom.

In terms of Growth, PEN ranks in the top 1% of equities. The company is forecast to generate significantly higher Return on Assets at 19.25% compared to the industry average of 13.38. 

Earnings are forecast to grow at 77.7% per year — far above the industry’s projected rate of 15.28% and the wider market’s 17.79%. 

The same holds true for revenue — consensus estimates have pegged revenue growth at 12.02% — the expectation for the medical device industry is 8.06%, while the wider market is forecast to see revenue growth of 10.21% per year.

Sentiment is Penumbra’s second-strongest rating, as it ranks in the 93rd percentile in this category. The metric takes into account more than just analyst ratings — for instance, the fact that the company’s insider selling and buying are relatively evenly matched, with 40% of such transactions being purchases, also contributes to the high rating.

Since we did mention analyst coverage, it has been overwhelmingly positive since the start of the year — 7 Strong Buy ratings have been maintained, 1 has been initiated, and a single Hold rating has also been reiterated since the start of 2025.

Lastly, the business is light on debt, with a debt-to-equity (D/E) ratio of just 0.36. Moreover, short-term assets, valued at $999.71 million, exceed the sum of short-term liabilities at $158.63 million and long-term liabilities at $221.80 million put together. With that in mind, it’s little wonder Penumbra stock ranks in the 91st percentile according to Financials.

PEN shares are teetering on the edge of retesting their year-to-date (YTD) high. The company’s latest earnings report, published on April 23, saw both earnings and revenues beat estimates by double-digit percentages. While there’s no guarantee that the level of resistance established at that recent high will be breached, there’s quite a strong case to be made for Penumbra Inc stock as a solid long-term investment.

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