While telehealth stocks, once stars of the pandemic era, have seen a recent dip in investor interest, savvy investors recognize the sector’s bright future. Moreover, according to TalkSpace (NASDAQ:TALK) CEO Jon Cohen, it could be argued that the pandemic catapulted telehealth forward by a decade, ushering in a new era of at-home primary and specialty care demanding investor attention.
Furthermore, the consensus over the health of the U.S. economy is largely positive, which bodes well for relatively risky plays such as telehealth stocks. However, it’s imperative to understand that not all telehealth stocks are created equal, which is why it’s crucial to separate the wheat from the chaff. That said, these premier telehealth stocks are set to deliver substantial value to those who act swiftly.
Telehealth Stocks: Hims & Hers Health (HIMS)
Hims & Hers Health (NYSE:HIMS) has been killing it at the stock market, posting a year-to-date gain of 51%. The surge is due to strategic expansions into weight loss and cardiovascular health, alongside MedMatch technology implementation, showcasing its growth-centric approach.
Financially, HIMS is excelling with it, delivering a 65.50% revenue increase on a year-over-year basis (YOY), surpassing the sector’s 6.49% median. Its fourth-quarter (Q4) GAAP earnings per share beat expectations by three cents, showcasing stellar performance. Additionally, its subscriber count surged to 1.5 million, a 48% boost from the previous year, signaling solid market growth and acceptance.
Furthermore, HIMS’s strategic alliance with Hartford HealthCare significantly enhances its market position by broadening the spectrum of accessible in-person services, thus amplifying its healthcare delivery prowess. Reflecting the market’s confidence in this strategy, Wall Street has accorded HIMS a Buy rating, projecting an upside potential of 2.6%.
CVS Health (CVS)
CVS Health (NYSE:CVS) is redefining primary care with its innovative CVS Health Virtual Primary Care platform, integrating several healthcare services into a unified digital experience. The strategic move, bolstered by two major acquisitions, emphasizes its commitment to a hybrid care model, which efficiently streamlines patient and provider processes. Such advancements signify CVS’s ambition to lead the healthcare revolution, making primary care more accessible and efficient.
Moreover, CVS’s strategic investments in telepsychiatry and Carbon Health underscore its commitment to transforming telemental health services. Boasting a 95% patient satisfaction rate in its sector, the company is establishing a dominant presence in its niche. That dedication to innovation positions CVS Health as a pivotal force in the evolution of virtual healthcare.
Despite a recent financial outlook adjustment, CVS’s stock remains enticing, trading at 9.05 times forward earnings and valued at 0.54 times free cash flow (FCF). Simultaneously, the company’s robust $10.4 billion FCF in 2023 underscores its financial health and operational prowess.
DexCom (DXCM)
Shares of continuous glucose monitor (CGM) manufacturer DexCom (NASDAQ:DXCM) are up more than 15% in the past six months.
The recent announcement of Stelo, a leading CGM tailored for individuals with type 2 diabetes for non-insulin users, is likely a major catalyst for DXCM’s expansion. Moreover, Stelo could revolutionize diabetes management by offering a custom software experience, leveraging DXCM’s sensor platform to meet the specific needs of this demographic.
The company’s innovative devices enable continuous glucose monitoring and real-time tracking of blood sugar levels during daily activities such as eating and exercising. Hence, its innovative devices showcase medical device companies’ significant role in the evolving telemedicine sphere.
Looking ahead, DexCom forecasts a promising future, expecting 2024 revenues to hit $4.15 to $4.35 billion, roughly 18% higher than 2023 sales at the midpoint. That projection is indicative of the company’s confidence in continuous top-line growth, fueled by its innovative telemedicine solutions, which look to improve patient outcomes.
On the date of publication, Muslim Farooque did not hold (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.
