When stocks in the healthcare sector get absolutely pummeled, it can create opportunities to buy into companies at depressed valuations. The key word here is "can"—because sometimes stocks are cheap for very good reasons.

The Relative Strength Index is a momentum indicator that compares a stock's performance on up days versus down days. It gives traders a sense of whether a stock is overbought or oversold in the short term. Generally, an RSI below 30 suggests a stock is oversold, meaning it's been sold off aggressively and might be due for a bounce. Of course, that doesn't mean it will bounce—just that it's technically oversold.

Here are three major healthcare stocks with RSI readings near or below 30, along with the context you need to understand why they've been hammered.

Inotiv Inc

Inotiv Inc. (NOTV) reported preliminary fourth-quarter and fiscal year 2025 revenue results on November 17. President and CEO Robert Leasure Jr. struck an optimistic tone despite the stock's brutal performance: "During the fourth quarter of fiscal 2025, we continued to execute on the financial goals we discussed during our investor day in May. We have continued to see strong contract awards in our Discovery and Safety Assessment services business, which grew sequentially in the fourth quarter and were up 60% over the same period last year."

The company anticipated consolidated revenue between $137.5 million and $138.5 million for the fourth quarter, which management said was in line with expectations and an improvement over the prior year period. Yet the market wasn't impressed. The stock plummeted roughly 38% over five days and hit a 52-week low of $0.66.

RSI Value: 26.7

NOTV Price Action: Shares of Inotiv dropped 33.2% to close at $0.69 on Monday.

Edge Stock Ratings: 2.53 Momentum score.

AirSculpt Technologies Inc

AirSculpt Technologies Inc. (AIRS) delivered worse-than-expected third-quarter results on November 7 and lowered its fiscal 2025 revenue outlook. That's never a recipe for stock price appreciation.

CEO Yogi Jashnani tried to put a positive spin on things: "During the quarter, we made strong progress on our key initiatives that focused on new growth opportunities, margin improvement, and debt reduction. While third quarter revenue was lower than anticipated, this is reflective of timing, instead of the trajectory of our business."

Investors didn't buy the "timing" explanation. The stock fell about 60% over the past month and touched a 52-week low of $1.53. When a company misses estimates and cuts guidance, the market tends to shoot first and ask questions later.

RSI Value: 29.3

AIRS Price Action: Shares of AirSculpt Technologies tumbled 23.8% to close at $4.17 on Monday.

Neuronetics Inc

Neuronetics Inc. (STIM) cut its fiscal 2025 sales guidance below expectations on November 4, which is about the worst thing a company can do if it wants to keep shareholders happy.

"Our third quarter results reflect continued progress as we integrate and optimize our combined operations," said Keith Sullivan, President and CEO of Neuronetics. That's corporate speak for "we're working on it, but things aren't going as planned."

The stock dropped roughly 40% over the past month and hit a 52-week low of $0.67. At these levels, the technical indicators are screaming oversold.

RSI Value: 23.9

STIM Price Action: Shares of Neuronetics fell 17.1% to close at $1.65 on Monday.

The Bottom Line on Oversold Stocks

It's worth emphasizing that an oversold reading doesn't mean a stock is a guaranteed buy. It simply means the selling has been aggressive and the stock might be due for a technical bounce. All three of these companies have legitimate business challenges—missed estimates, lowered guidance, and investor confidence that's taken a beating.

But for traders looking at technical indicators, these RSI readings suggest the selling might have gotten overdone in the short term. Whether these stocks actually bounce depends on whether the underlying business problems get resolved or if investors see enough value at these depressed levels to step in.

That's the thing about oversold stocks: they're oversold for a reason, but sometimes the market overreacts. The trick is figuring out which is which.