We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Booming Telehealth Market Lures More IPOs and M&A Deals
Read MoreHide Full Article
Of late, European tech company UK healthtech’s startup Babylon Health announced that it will go public in the United States via a merger. Babylon Health provides online consultations and also has a symptom-checking app.
This most recent deal brings into notice the increasing trend of public offerings and acquisitions taking place in the lucrative telehealth industry.
The COVID-19 pandemic understandably perked up the telemedicine market, buoyed by the universally mandated protocols of staying-at-home and social distancing. The size of the telehealth market is ballooning and more and more companies are thronging the space to grab a pie of the very promising industry.
Digital Health IPO Going Strong for the Third Straight Year
Even before the COVID-19 had hit hard, the digital health market was witnessing a ramped-up activity. Companies in the digital health space were actively expanding their scale and size as technological percolation was boosting virtual heath care. In 2019, entities like Health Catalyst, Livongo Health, Phreesia and Change Healthcare went public. Speculations were rife then whether the IPO wave will continue blowing in 2020.
But the IPO trend gained further momentum with COVID-19 acting as a trigger. Remote healthcare gathered steam as people were forced to stay indoors to stem the coronavirus spread. Given that scenario, virtual healthcare was the only viable option left to address healthcare needs.
This led to a stratospheric rise in demand for products and services for online health monitoring. Many privately-held companies thus capitalizing on this current environment walked the IPO route to raise money from the public for expanding their scale and size. As an evidence, in 2020, U.S. telehealth companies, namely GoodRx Holdings Inc. (GDRX - Free Report) , American Well Corporation (AMWL - Free Report) , Accolade, Inc. (ACCD - Free Report) , SOC Telemed and many others went public.
In 2021, Hims & Hers Health, Inc. (HIMS) came out with initial public offering. It is a multi-specialty telehealth platform that connects consumers to licensed healthcare professionals, thereby enabling medical care for multiple conditions related to mental health, sexual health, dermatology, primary care and more.
As IPOs are being floated, acquisitions of telehealth companies and other healthcare companies are also fast catching up.
This kind of buyouts helps players integrate vertically. It also suggests that the telehealth space is evolving rapidly and that companies wishing to get an instant presence are snapping up established players.
This year, Cigna purchased MDLive while UnitedHealthcare bought Change Healthcare to get an instant foothold in the telehealth market.
Investors’ Most Desirable Place
Per MarketsandMarkets, the global telehealth market is expected to witness a CAGR of 37.7% over the 2020-2025 forecast period.
Experts say that the digital health sector is attracting people in droves and fetching in private investments because of a combination of strong product suite, soaring revenues, efficient management teams, and massive markets with a promising potential.
With higher telemedicine uptake, the telehealth companies naturally made the most of it by generating wealthy returns for investors. For instance, Teladoc Health, Inc. (TDOC - Free Report) , the oldest company in the telehealth space, skyrocketed 139% in 2020 compared with its industry’s average of 9.7%.
Image Source: Zacks Investment Research
Bottomline
Looking back at 2019, it seemed that the digital health IPO was just the beginning. Even though telehealth became more popular in recent years, it continues to draw takers from the industry, courtesy of technological revolution and the relaxation of Medicare telehealth regulations. There still exist many companies, which are privately held and backed by venture capitalists. These may come out in the market with public offering, keeping the IPO blitz alive.
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Image: Bigstock
Booming Telehealth Market Lures More IPOs and M&A Deals
Of late, European tech company UK healthtech’s startup Babylon Health announced that it will go public in the United States via a merger. Babylon Health provides online consultations and also has a symptom-checking app.
This most recent deal brings into notice the increasing trend of public offerings and acquisitions taking place in the lucrative telehealth industry.
The COVID-19 pandemic understandably perked up the telemedicine market, buoyed by the universally mandated protocols of staying-at-home and social distancing. The size of the telehealth market is ballooning and more and more companies are thronging the space to grab a pie of the very promising industry.
Digital Health IPO Going Strong for the Third Straight Year
Even before the COVID-19 had hit hard, the digital health market was witnessing a ramped-up activity. Companies in the digital health space were actively expanding their scale and size as technological percolation was boosting virtual heath care. In 2019, entities like Health Catalyst, Livongo Health, Phreesia and Change Healthcare went public. Speculations were rife then whether the IPO wave will continue blowing in 2020.
But the IPO trend gained further momentum with COVID-19 acting as a trigger. Remote healthcare gathered steam as people were forced to stay indoors to stem the coronavirus spread. Given that scenario, virtual healthcare was the only viable option left to address healthcare needs.
This led to a stratospheric rise in demand for products and services for online health monitoring. Many privately-held companies thus capitalizing on this current environment walked the IPO route to raise money from the public for expanding their scale and size. As an evidence, in 2020, U.S. telehealth companies, namely GoodRx Holdings Inc. (GDRX - Free Report) , American Well Corporation (AMWL - Free Report) , Accolade, Inc. (ACCD - Free Report) , SOC Telemed and many others went public.
In 2021, Hims & Hers Health, Inc. (HIMS) came out with initial public offering. It is a multi-specialty telehealth platform that connects consumers to licensed healthcare professionals, thereby enabling medical care for multiple conditions related to mental health, sexual health, dermatology, primary care and more.
As IPOs are being floated, acquisitions of telehealth companies and other healthcare companies are also fast catching up.
This kind of buyouts helps players integrate vertically. It also suggests that the telehealth space is evolving rapidly and that companies wishing to get an instant presence are snapping up established players.
This year, Cigna purchased MDLive while UnitedHealthcare bought Change Healthcare to get an instant foothold in the telehealth market.
Investors’ Most Desirable Place
Per MarketsandMarkets, the global telehealth market is expected to witness a CAGR of 37.7% over the 2020-2025 forecast period.
Experts say that the digital health sector is attracting people in droves and fetching in private investments because of a combination of strong product suite, soaring revenues, efficient management teams, and massive markets with a promising potential.
With higher telemedicine uptake, the telehealth companies naturally made the most of it by generating wealthy returns for investors. For instance, Teladoc Health, Inc. (TDOC - Free Report) , the oldest company in the telehealth space, skyrocketed 139% in 2020 compared with its industry’s average of 9.7%.
Bottomline
Looking back at 2019, it seemed that the digital health IPO was just the beginning. Even though telehealth became more popular in recent years, it continues to draw takers from the industry, courtesy of technological revolution and the relaxation of Medicare telehealth regulations. There still exist many companies, which are privately held and backed by venture capitalists. These may come out in the market with public offering, keeping the IPO blitz alive.
Among the stocks mentioned above, Teladoc, American Well and SOC Telemed currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>