Heal From Home: Top 5 Telemedicine Stocks (4月 2024)

Improving Health Consultation

Medicine has always been centered on the patient-doctor relationship. Everyone can relate to the need to have a person listen to whatever is wrong with our body (or mind) and receive the proper care and advice in response.

Ideally, this should be a smooth and convenient process. Especially considering patients are, by definition, not in their best shape when they need to see a doctor.

In practice, a doctor’s visit can be a complicated affair. Finding an appointment, driving to the doctor’s office, getting delayed in the waiting room, etc…

I think everyone has been in a situation where he wished that a doctor could have come to him instead and received the luxury of a consultation at home. This is possible, but at a premium price that most people cannot afford.

The Rise of Telemedicine

The obvious reason why doctor home visits are expensive is that they waste a lot of the doctor’s time in transit. A time that could be better used helping other patients. After all, a professional trained for almost a decade is not being productive when behind the wheel.

This was before everyone had a device that could communicate in real-time video. The rise of the smartphone builds the basic infrastructure for allowing a doctor to reach patients in their homes while still in the office.

Of course, the pandemic has been fueling this fire, with as few in-person interactions as possible. But the inherent advantage of telemedicine means it is here to stay:

• More convenient for the patient.
• The better possibility to digitalize medical profiles.
• Possibility to access more doctors if your regular one is unavailable.
  • Quicker access to care.
  • Easier to get a second opinion.
• Enhance possibilities for anonymized data collection to improve drug prescription, insurance policies, etc…

More Complicated Than It Looks

Of course, this is not that simple. The doctor needs to be able to keep confidential the interactions to comply with regulations. He also needs to be able to write the digital version of a paper prescription, add data to the patient’s medical files, check insurance coverage, etc. He could do things easily in person but not so through a smartphone.

This is why telemedicine needed a new category of service provider, offering patients and doctors the necessary infrastructure & interface for online medical consultation as secure, efficient, and safe as one in-person.

A few companies have risen to the challenge and taken over this market, which is still in its infancy.

Top 5 Best Telemedicine Stocks

(stocks are sorted by market capitalization at the time of the writing of this article)

1. M3, Inc.

M3 is a Japanese company whose mission is “Making use of the Internet to increase, as much as possible, the number of people who can live longer and healthier lives, and to reduce, as much as possible, the amount of unnecessary medical costs.”

M3 is centered around telemedicine and the digital transformation of healthcare as a whole. Notably, its m3.com website claims 320,000 doctors registered. It provides a job board, medical news, telemedicine Q&A solution “AskDoctors,” and various medical information websites like QLife.

M3 is also a serial acquirer, using the purchase of foreign companies for its expansion abroad. In just the last two years, it acquired:

• Scribendi medical paper platform in Canada.
• MedPlanet market research services in France.
• Michael Allen Company is a pharma consulting firm in the USA.
• Remedium recruiting solution in the UK.
• Rinkai Medical Service is a health checkup provider in Japan.
• iDoctus telemedicine solution in Spain and Latin America.
• Pharma-insight market research in Germany
• MSRA clinical trial network in the USA.
• TheMedical Accounting and EHR Business from Canon Medical Systems
• Login Nursing care facilities SaaS in Japan.

The list could be a lot longer, but it represents a good snapshot of the extremely busy acquisition schedule for M3.

Overall, the company is shaping itself as an international giant in everything healthcare related, from market research, clinical trials, telemedicine, etc.

Lastly, the IPO of M3-backed MedLive (2192.HK) has added a massive cash injection into M3 in 2021.

Source: M3

A tailwind for the company is that Japan is a quickly aging society. So, the demand for medical care is rising quickly, with not enough professionals to provide it. Telemedicine can help increase the overall efficiency of the healthcare system and help handle this issue.

The company has been growing very quickly, both in revenue and net profits. It is an interesting play for investors looking for an aggressively growing company but already profitable and diversified over the whole spectrum of online healthcare and medical data.

2. Doximity, Inc.

(DOCS )

The company claims, “Aside from the iPhone, there’s never been a piece of technology adopted by clinicians as quickly as Doximity, with 80% of U.S. doctors and 50% of all NPs and physician assistants as verified members”.

A key feature is how the patient can answer by clicking a message without downloading an app. It also provides a link with the patient without said patient having direct access to the personal cell phone of their doctor.

This is some impressive market penetration, with now the question being for the company to increase usage rate, monetization, and cross-selling opportunities.

Source: Doximity

The company notably extends beyond teleconsultations, with medical file transfer (replacing paper mail and fax), medical news, and even hiring. Another opportunity is the pharmaceutical marketing segment, now dominated by low-tech methods.

Source: Doximity

The company has experienced explosive growth, with revenues growing 48% CAGR and EBITDA growing 106% CAGR.

Source: Doximity

The company is profitable and trading a rather high multiple (higher than 60 P/E), reflecting the very high growth expectations for the stock. It will best fit patient investors counting on Doximity to maintain its leading position in telemedicine in the USA and potentially hope for expansion abroad.

3. Teladoc Health, Inc.

(TDOC )

Teladoc was a market darling of the pandemic, notoriously backed by Ark Invest’s Cathy Wood. While the stock price has since cooled down, the company has made some progress in improving revenues and profitability in 2022. Still, losses are large and cause concern.

Teladoc’s strategy is to create a model of virtual primary care, in opposition to more conservative hybrid care models (mixing in-person and virtual consultations). The company expects this model to become the main medical care model over time, especially with the rise of monitoring connected devices. Teladoc also bought the chronic care management provider and device maker Livongo to support this strategy in 2020.