The digital health industry is booming, driven by technological advancements, rising health awareness, and a growing aging population. This presents a golden opportunity to tap into Hims & Hers Health, Inc. (HIMS), GoodRx Holdings, Inc. (GDRX), and Talkspace, Inc. (TALK), which are well-positioned to ride the exciting growth wave of digital health.
As the global geriatric population continues to grow, the need for constant health management has never been more critical. Coupled with an increasing focus on health and wellness, people are increasingly seeking proactive and personalized healthcare. This shift is fueling the adoption of digital health technologies at an unprecedented rate.
Technological advancements are at the heart of this surge. Wearable devices, mobile health applications, and telemedicine platforms are transforming healthcare. Artificial intelligence and machine learning, in particular, are revolutionizing healthcare applications, from image analysis and patient monitoring to medical device automation, enhancing clinical workflows and efficiency.
The surge in mobile and smartphone subscriptions is another key factor driving this growth. With approximately 7.21 billion smartphone users globally, representing around 90% of the world’s population, mobile devices are becoming essential tools for accessing digital health solutions. This growing mobile connectivity is crucial for the future of digital health.
Looking forward, as per a report by Fortune Business Insights, the global digital health market is expected to soar from $376.68 billion in 2024 to $1.50 trillion by 2032, exhibiting a CAGR of 18.9%. The rapid expansion indicates the vast potential and lucrative opportunities within the digital health sector.
So, let us dive deep into the fundamentals of three digital health stocks, starting with #3.
Stock #3: Hims & Hers Health, Inc. (HIMS)
HIMS connects consumers with licensed healthcare professionals through its telehealth platform. Customers can easily purchase curated prescription and non-prescription health products and services directly through HIMS' websites or mobile apps, ensuring convenience and personalized care.
On November 21, HIMS announced that its customers could now supplement their treatment plans with daily meal replacement bars and shakes to support their comprehensive weight loss journeys. These products are designed to enhance HIMS’ doctor-approved, individualized weight management plans.
By providing a more holistic approach to weight loss, HIMS can strengthen its position as a comprehensive health solution provider, attracting a wider range of customers.
On September 18, HIMS announced an initiative to offer access to commonly compounded GLP-1 prescriptions for as low as $99 a month. The offer is available to eligible U.S. military personnel, veterans, teachers, nurses, and first responders. This move will increase HIMS’ customer base by tapping into vital and underserved groups.
For the fiscal third quarter that ended September 30, 2024, HIMS’ revenue increased 77.1% year-over-year to $401.56 million. Its gross profit grew 69.7% from the year-ago value to $317.89 million. Moreover, the company’s adjusted EBITDA rose 311.1% year-over-year to $51.10 million.
Additionally, total comprehensive income and net income per share attributable to common stockholders came in at $75.99 million and $0.32, compared to a net loss and loss per share of $7.44 million and $0.04 in the previous year’s quarter, respectively.
Analysts expect HIMS’ revenue and EPS for the fiscal fourth quarter ending December 2024 to increase 90.4% and 961.8% year-over-year to $469.48 million and $0.11, respectively. Moreover, the company topped the consensus revenue and EPS estimates in all four trailing quarters, which is impressive.
Shares of HIMS have surged 62.8% over the past six months and 281.6% over the past year, closing the last trading session at $33.92.
HIMS’ POWR Ratings mirror its fundamentals. HIMS has an A grade for Quality and Growth. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
Within the Medical - Services industry, HIMS is ranked #33 out of 63 stocks. In addition to the POWR Rating highlighted above, you can check HIMS’ ratings for Stability, Sentiment, Momentum, and Value here.
Stock #2: GoodRx Holdings, Inc. (GDRX)
GDRX provides a consumer-focused digital healthcare platform. The company offers a price comparison platform that provides consumers with relevant prescription pricing, and other healthcare products and services, as well as telehealth services through the GoodRx Care platform.
On October 31, GDRX unveiled its new e-commerce platform with Opill® as its launch partner. This move could significantly enhance GDRX’s competitive edge in the rapidly growing digital health market. By offering a streamlined, user-friendly shopping experience, GDRX strengthens its brand presence and attracts a broader customer base.
Additionally, on October 16, GDRX announced a partnership with retail pharmacies, including Hy-Vee, a grocery retailer with over 275 retail pharmacies. The collaboration introduces Affirm’s “Pay Over Time” option for select medications.
By offering flexible payment plans, GDRX would be able to cater to a wider range of consumers, driving customer loyalty and increasing medication access. Additionally, the expansion into the retail pharmacy sector enables GDRX to tap into a larger market, broadening its reach and solidifying its leadership position in the healthcare space.
For the fiscal 2024 third quarter that ended September 30, GDRX’s revenue increased 8.5% year-over-year to $195.25 million. Its adjusted operating income grew 17.6% from the year-ago value to $49.39 million.
Moreover, the company’s adjusted net income and adjusted EPS rose 25% and 33.3% from the prior year’s quarter to $31.94 million and $0.08, respectively.
Street expects GDRX’s revenue and EPS for the fiscal year ending December 2025 to increase 4.1% and 120.5% year-over-year to $825.66 million and $0.16, respectively. In addition, the company topped the consensus revenue estimates in three of the four trailing quarters.
GDRX’s shares surged 4.3% over the past five days to close the last trading session at $5.07.
GDRX’s solid prospects are projected in its POWR Ratings. The stock has an overall rating of B, translating to a Buy in our proprietary rating system.
GDRX has an A grade for Growth and a B for Value. Within the Medical - Pharmaceuticals industry, it is ranked #36 out of 156.
Click here to access GDRX’s ratings for Quality, Momentum, Sentiment, and Stability.
Stock #1: Talkspace, Inc. (TALK)
TALK operates a behavioral healthcare company that offers psychotherapy and psychiatry services through its platform to individuals, enterprises, health plans, and employee assistance programs. The company also offers text, audio, and video-based psychotherapy from licensed therapists.
On October 23, TALK announced its strategic partnership with Wisdo Health, an AI-powered platform addressing loneliness and improving mental health for the 65+ community. The collaboration expands TALK's services, enhancing access to mental health resources while reducing healthcare costs.
It could boost member engagement, address the growing senior mental health crisis, and position TALK as a leader in senior health, driving both growth and market expansion.
On September 17, TALK partnered with Amazon Health Services to enhance the visibility of its mental health care services on Amazon.com. The partnership allows millions of U.S. shoppers to easily discover TALK’s behavioral health benefits, granting access to over 5,000 licensed therapists and increasing awareness and accessibility for those in need.
By tapping into the company’s massive customer base, TALK can ensure more people are aware of its offerings, driving both growth and market penetration.
For the fiscal third quarter that ended September 30, 2024, TALK’s total revenue increased 22.6% year-over-year to $47.40 million. Its gross profit grew 14.7% from the year-ago value to $21.62 million. Plus, the company’s adjusted EBITDA came in at $2.35 million, compared to a loss of $2.80 million in the previous year’s quarter.
Additionally, TALK reported a net income of $1.87 million and net income per share of $0.01, reversing the previous year's quarter's net loss of $4.41 million and loss per share of $0.03.
The consensus revenue and EPS estimates of $232.88 million and $0.06 for the fiscal year ending December 2025 exhibit a year-over-year rise of 23.3% and 833.3%, respectively. Furthermore, the company surpassed the consensus revenue estimates in three of four trailing quarters.
Shares of TALK have surged 39.9% over the past six months and 59.7% over the past year to close the last trading session at $3.61.
TALK’s prospects are reflected in its POWR Ratings. The stock has a B grade for Sentiment and Quality.
Within the Medical - Services industry, TALK is ranked #30 out of 63 stocks. Click here to access its Momentum, Value, Growth, and Stability ratings.
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HIMS shares rose $0.16 (+0.47%) in premarket trading Thursday. Year-to-date, HIMS has gained 281.12%, versus a 29.05% rise in the benchmark S&P 500 index during the same period.
About the Author: Aanchal Sugandh
Aanchal's passion for financial markets drives her work as an investment analyst and journalist. She earned her bachelor's degree in finance and is pursuing the CFA program. She is proficient at assessing the long-term prospects of stocks with her fundamental analysis skills. Her goal is to help investors build portfolios with sustainable returns.
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