Few trends are as easily identifiable as the structural opportunity in the healthcare technology space.
As a society, we have undergone a transformative experience as a society over the past year, with so many taken-for-granted facets of daily life halted, rearranged, and rebuilt in what ultimately may be a superior form.
According to a recent report from Grand View Research, the global healthcare IT market size was valued at $74.2 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 10.7% over the next 7 years, making it one of the fastest-growing major markets over the coming decade.
High demand and adoption of preventive care along with increasing funding for various mobile health startups is advancing the market growth. In addition, growing network coverage and rising improvements in network infrastructure are supporting the growth of this market.
The research notes that technological advancements, with respect to healthcare, for improving the IT infrastructure, such as the implementation of AI, IoT, and big data in healthcare processes, are also fueling the market growth. Furthermore, growing consumer demand for effective and efficient treatment coupled with increasing awareness regarding new and upgraded technologies is anticipated to boost market growth over this period.
That has enormous implications for stocks in the space. We look at several interesting opportunities here, including Teladoc Health Inc (NYSE: TDOC), 1Life Healthcare Inc (NASDAQ: ONEM), USA Equities Corp (OTC US: USAQ), and American Well Corp (NYSE: AMWL).
Teladoc Health Inc (NYSE: TDOC) covers various clinical conditions, including non-critical, episodic care, chronic, and complicated cases like cancer and congestive heart failure, as well as offers telehealth solutions, expert medical services, behavioral health solutions, guidance and support, and platform and program services. Its platform enables patients and providers to have an integrated smart user experience through mobile, Web, and phone-based accessed points.
This is one of the core plays in the space at this point given its prior commitment to the Telehealth revolution ahead of the advent of the pandemic.
Teladoc Health Inc (NYSE: TDOC) most recently announced the launch of myStrength Complete, an integrated mental health service providing personalized, targeted care to consumers in a single, comprehensive experience. The announcement comes as more than half of people with mental health concerns report that they do not know where to start when getting care, highlighting the importance of the digital front door myStrength Complete will provide.
“We are connecting the full range of mental health services from apps to clinicians so that people can access timely help, tailored to their needs and on their terms,” said David Sides, chief operating officer at Teladoc Health. “myStrength Complete meets the dual consumer needs of comprehensive mental health care and a simplified experience in one service – developed through the integration of Teladoc Health and Livongo.”
Even in light of this news, TDOC hasn’t really done much of anything over the past week, with shares logging no net movement over that period.
Teladoc Health Inc (NYSE: TDOC) pulled in sales of $453.7M in its last reported quarterly financials, representing top-line growth of 150.9%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($722.6M against $260.4M).
1Life Healthcare Inc (NASDAQ: ONEM), also known to many as “One Medical”, promulgates itself as a membership-based and technology-powered primary care platform with seamless digital health and inviting in-office care, convenient to where people work, shop, live, and click.
Headquartered in San Francisco, 1Life Healthcare, Inc. is the administrative and managerial services company for the affiliated One Medical physician-owned professional corporations that deliver medical services in-office and virtually. 1Life and the One Medical entities do business under the “One Medical” brand.
1Life Healthcare Inc (NASDAQ: ONEM) most recently announced the appointment of Scott C. Taylor to its board of directors. As the former Executive Vice President, General Counsel, and Corporate Secretary of Symantec Corporation (now called NortonLifeLock), Mr. Taylor has deep expertise in corporate compliance and governance as well as acumen in government affairs, public policy, corporate responsibility, and philanthropy, and ethics. He is a seasoned executive with decades of experience as a leader in numerous industries across various stages of business growth.
“We are so pleased to welcome Scott C. Taylor to the board,” said Amir Dan Rubin, Chair & CEO of One Medical. “Scott brings a distinguished career background with leading technology-driven organizations, and significant executive leadership experience having served as General Counsel for a public company. Scott also brings significant board experience, including with public companies.”
While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action ONEM shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -3% on above-average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities.
1Life Healthcare Inc (NASDAQ: ONEM) generated sales of $119.6M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of -1.8% on the top line. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($703.7M against $143.1M).
USA Equities Corp (OTCMKTS: USAQ) engages in the provision of medical device technology and software as a service. It focuses on enabling primary care physicians to increase their revenues by providing them with relevant, value-based tools to evaluate and treat chronic disease through reimbursable procedures. Its products will enable physicians to diagnose and treat patients with chronic diseases which they historically have referred to specialists.
The company’s near-term objective is to acquire five thousand physicians by 2023, which would generate $17.9 million on the top line. According to its materials, all current and future products and services will be sold through the same distribution channel and customer base allowing it to generate additional revenue without the customer acquisition cost.
USA Equities Corp (OTCMKTS: USAQ) most recently announced it has entered into a co-promotion agreement with ENP Network, the largest web-based services provider to the nurse practitioner (NP) community and nurse practitioner associations with over 260,000 members.
ENP Network will provide marketing and advertising support focused on the 27,843 sole proprietor nurse practitioners in its network. The products covered by this agreement include AllergiEnd’s allergy diagnostic and allergen immunotherapy products and the upcoming University of Miami’s Miller School of Medicine Allergy Diagnostics and Allergen Immunotherapy Virtual CME event on June 26, 2021.
“We are very excited to be partnering with ENP Network which will further expand our independent medical provider customer network, leveraging ENP’s extensive network and industry knowledge of the nurse practitioner sector. Our AllergiEnd® allergy diagnostic and allergen immunotherapy products are well suited to provide nurse practitioners with enhanced chronic disease management, preventive solutions, and value-based digital tools to evaluate and treat their patients. These procedures are also reimbursable under existing government and private insurance programs, providing NPs with an additional revenue stream for their practice. We look forward to announcing additional industry partnerships as we continue to execute on our growth strategy,” stated USAQ Chief Executive Officer Troy Grogan.
If you’re long this stock, then you’re liking how the stock has responded to the announcement. USAQ shares have been moving higher over the past week overall, pushing about 4% to the upside on above-average trading volume.
USA Equities Corp (OTCMKTS: USAQ) is projecting entry-level monthly subscriptions will be $299/month or $3,588 per year. Its near-term projection is to acquire 5,000 physician clients by the end of 2023 and over 20,000 physicians in the medium to longer-term, which is still less than five percent of the total target physician audience in the US today. According to the Journal of Pharma and Healthcare: “There are over 450,000 primary care physicians, including licensed nurse practitioners, in the United States.” With a range between $3,588 – $10,000 per physician per year, USAQ is targeting an addressable annual market of roughly $1.6 billion. Capturing just 5% of this market would generate revenue of at least $87 million.
American Well Corp (NYSE: AMWL) trumpets itself as a leading telehealth platform in the United States and globally, connecting and enabling providers, insurers, patients, and innovators to deliver greater access to more affordable, higher quality care. Amwell believes that digital care delivery will transform healthcare.
The Company offers a single, comprehensive platform to support all telehealth needs from urgent to acute and post-acute care, as well as chronic care management and healthy living. With over a decade of experience, Amwell powers telehealth solutions for over 2,000 hospitals and 55 health plan partners with over 36,000 employers, covering over 80 million lives.
American Well Corp (NYSE: AMWL) most recently announced financial results for the first quarter ended March 31, 2021, including total active providers of approximately 81,000 at the end of the first quarter increased 240% compared to a year ago and total visits of 1.6 million in the first quarter increased 120% compared to a year ago.
“Our first-quarter results represent a strong start to the year and demonstrate continued momentum across our business. As telehealth evolved from a complimentary service to a fundamental enabler of mainstream healthcare, we too have advanced our innovation and investment strategy: our next generation platform Converge is designed to enable healthcare’s most trusted players to carry out digitally empowered, full-spectrum, unified online, and in-person care. At its core, we believe Converge offers exceptional usability, reliability, scalability, and flexibility. With its modular open architecture and longitudinal capabilities, we believe Converge will simplify innovative collaboration across the ecosystem. We expect to Converge to expand our market opportunity and enhance our own efficiencies over time. We also expect it to accelerate innovators’ ability to impact clinical and financial outcomes by creating a faster path to implement new technologies and services in a single integrated platform,” said Dr. Ido Schoenberg, Chairman, and Co-CEO.
Even in light of this news, AMWL has had a rough past week of trading action, with shares sinking something like -6% in that time. That said, chart support is nearby, and we may be in the process of constructing a nice setup for some movement back the other way.
American Well Corp (NYSE: AMWL) generated sales of $57.6M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of -4.7% on the top line.
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