Wearables are becoming very popular because many consumers are using them to monitor their progress during exercise and to track their health. Deloitte has estimated that the sales of wearable devices for the medical sector will jump to 440 million devices next year from 275 million devices in 2021. And this year, 184 million smartwatches are expected to be sold, up 16% versus 2022. Many wearable tech stocks can benefit from the greatly increased demand. And, over the longer term, easing inflation and a boom in consumer spending will only contribute to this trend.
Also over the longer term, as more highly computer literate consumers age in the U.S. and Europe, the demand for smartwatches that can monitor health is indeed likely to soar, producing a wearable tech boom.
Here are three of the top wearable tech stocks to watch now.
Garmin (GRMN)
When it comes to wearables, Garmin (NYSE:GRMN) specializes in selling devices for specific types of outdoor activities, such as swimming, golf, and hiking. I believe that, during the pandemic, Americans became more health-conscious and more attached to outdoor activities. Consequently, I think that many more Americans will become devoted to outdoor, athletic hobbies and that, over the longer term, that trend will be very positive for Garmin and GRMN stock.
Garmin, however, needs to do more to promote its outdoor watches, as its sales from those devices sank 27% year over year in the first quarter. However, Q1 is probably the worst seasonal period for smartwatch sales as the weather is cold and the holiday season has just ended.
Moreover, the shares are changing hands for a reasonable forward price-to-earnings ratio of 19.2x and carry an attractive dividend yield of 3%.
After analyzing Garmin’s finances, Seeking Alpha columnist Prasanna Rajagopal reports that the firm’s dividend is safe, and, given the fact that the company has developed highly specialized products in a growing space, I agree with his assertion that the company could become a takeover target.
With multiple ways for GRMN stock to become a winner, it is one of the best wearable tech stocks to buy now.
QuickLogic (QUIK)
A developer of semiconductors and artificial intelligence technologies, QuickLogic (NASDAQ:QUIK) is a small company that focuses on a few very large markets, including wearables.
QUIK appears to have developed a number of highly innovative products for the wearables space. For example, it has created “an ultra-low-power, context-aware sensor hub” for wearables. It has also launched software called SensiML Analytics Toolkit that can be used to develop products which can be attached to wearables and measure various real-life metrics.
SensiML was actually a separate company that QuickLogic acquired back in 2019. SeniML’s software is being used to help create artificial intelligence systems.
In February, QUIK reported that “SensiML recently signed a significant deal with a top-tier semiconductor company to integrate a SensiML-powered solution to address its own customers’ demand for AI” in its chips.
QUIK has a reasonable forward price-to-sales ratio of about 4x, and analysts, on average, expect its sales to climb a hefty 30% this year.
Augmedix (AUGX)
Augmedix (NASDAQ:AUGX) has reconfigured Google Glass, Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) connected glasses that the tech giant has scrapped, to become a device for doctors.
Using the product, doctors can talk with and examine their patients while simultaneously talking to “human transcribers” who write down their conclusions. These transcribers can also “access the audio and video feed of the doctor-patient interaction.”
Insider Intelligence explains that the product “allows doctors to better connect with their patients” and enhances the quality of doctors’ documentation efforts.
Encouragingly, Augmedix’s top line climbed to nearly $31 million last year from $22.16 million in 2021, while its gross profit rose to nearly $14 million from $10 million.
The shares trade at a fairly low price-to-sales ratio of 2.15x.
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On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
