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Zacks Industry Outlook Highlights P3 Health Partners, Talkspace and Augmedix

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For Immediate Release

Chicago, IL – September 20, 2023 – Today, Zacks Equity Research discusses P3 Health Partners (PIII - Free Report) , Talkspace (TALK - Free Report) and Augmedix (AUGX - Free Report) .

Industry: Medical - Info Systems


The past three years of health crisis have led to exponential growth in the Medical Info Systems industry, thanks to the growing demand for contactless services. Even in the post-pandemic era, the popularity of distant treatment options and a paperless environment has not dropped. In fact, artificial intelligence (AI) and the Internet of Medical Things are advancing, leading to a tremendous upsurge in demand for digital healthcare options in hospitals and other healthcare settings. Apart from being used for the analysis of treatment patterns from a large set of data, AI is currently being extensively used in medical imaging.

Going by Precedence Research data as published by Binariks, the global market for healthcare information systems was worth $287.8 billion in 2022 and is projected to double in size by 2030. Subsequently, 80% of health systems claimed to have plans to increase their investment levels in digital health over the next five years (a HIMSS report).

The growing demand for all kinds of digital healthcare support, including telehealth, cloud computing, artificial intelligence, robotics and analytics, has created a unique opportunity for companies like P3 Health Partners (PIII), Talkspace (TALK) and Augmedix (AUGX). However, the healthcare system's excessive dependance on IT comes with its share of risks. Any data disruption in the cloud-based service might lead to massive loss of information, leading to a breakdown of the system.

Industry Description

The Zacks Medical Info Systems industry comprises companies, which develop and market healthcare information systems. These companies offer software and hardware solutions to healthcare providers with secure access to real-time clinical, administrative and financial data in a time-efficient manner. 

Focus on patient satisfaction, security of patient data and administrative cost control have increased the need for big data, 3D printing, blockchain and AI. Industry players like Omnicell and Allscripts are raking in millions from the sale of software and related hardware, professional services and IT outsourcing services, recurring service contracts for software maintenance and transaction processing services.

4 Trends Shaping the Future of the Medical Information Industry

Growing Demand for Contactless Services: During the pandemic, the need for contactless services grew enormously. But even when it was over, within the medical information systems space, the telehealth and remote patient monitoring segments continued to grow at a fast rate. Going by a Forbes article of 2022, telehealth is likely to stay for long, beyond the pandemic, and will likely be embedded into the healthcare vernacular. 

A Startechup report in 2023 stated that the use of AI in healthcare is helping medical professionals in several ways, such as speeding up the diagnosis process and automating hospital workflows through robotics, AI-driven chatbots to check symptoms and so on. Per a Markets and Markets report, the global remote patient monitoring market is projected to reach $117.1 billion by 2025 from $23.2 billion in 2020, at a CAGR of 38.2%.

Remote Healthcare and Insurance Coverage: While COVID-19 has introduced an all-new era of virtual healthcare service, there are some associated pitfalls. A Wall Street Journal report stated that major insurers have been rolling back the terms of this virtual care coverage, upon which customers are facing out-of-pocket charges on certain virtual visits. Going by a Healthcare Finance report, insurers are still speculative about how virtual care will look in the post-pandemic era. Meanwhile, considering telehealth and remote healthcare as the new normal, many insurance companies are now coming up to alter their coverage area.

EMR and Blockchain Gain Ground: Among the long-term trends, electronic health records (EHR), electronic medical records (EMR), predictive analytics and real-time alerting have been gaining prominence. These have led to the emergence of the Internet of Medical Things, which has enabled the use of a number of wearables, including ECG and EKG monitors, apart from other common medical measurement devices, to determine temperature, glucose level and blood pressure readings. 

The evolution of telemedicine and blockchain is another megatrend worth mentioning here. Leading healthcare companies like Humana, MultiPlan, Quest Diagnostics and UnitedHealth Group's Optum and UnitedHealthcare formed an alliance to launch the Synaptic Health Alliance pilot project on blockchain.

Rising Instances of Cyber Attacks: As healthcare becomes more wired and interconnected, cybersecurity is the primary concern of hospitals. In fact, security flaws are being increasingly found in electronic medical device operating systems or other devices like ECG machines, imaging scanners, infusion pumps and telemetry systems. Indeed, the pandemic has led to growing cyber dependency, which has made the space vulnerable to cyber-attacks.

Zacks Industry Rank

The Zacks Medical Info Systems industry falls within the broader Zacks Medical sector. It carries a Zacks Industry Rank #111, which places it in the top 44% of more than 250 Zacks industries.

The group's Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bright near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.

We will present a few stocks that have the potential to outperform the market based on a strong earnings outlook. But it's worth taking a look at the industry's shareholder returns and current valuation first.

Industry Underperforms S&P 500 and Sector

The industry has underperformed the Zacks S&P 500 composite as well as the sector over the past year.

The industry has declined 35.9% compared with the Zacks Medical sector's decline of 1.6%. The S&P 500 has risen 14.5% in the said time frame.

Industry's Current Valuation

On the basis of forward 12-month price-to-sales (P/S), which is commonly used for valuing medical stocks, the industry is currently trading at 5.37X compared with the S&P 500's 3.7X and the sector's 2.5X.

Over the last five years, the sector has traded as high as 22.41X, as low as 1.65X, and at the median of 5.27X.

3 Medical Info Systems Stocks to Bet On

P3, as a population health management company, is working on improving the lives of both patients and providers. P3 currently has an expansive network of more than 2,600 affiliated primary care providers across the country. The company's local teams of health care professionals manage the care of thousands of patients in 18 counties across five states. P3 supports primary care providers with value-based care coordination and administrative services that improve patient outcomes and lower costs.

P3 currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for 2023 revenues indicates a 16.2% improvement from 2022. For 2024, the company is expected to report revenue growth of 23.3%.

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Talkspace, as a virtual behavioral healthcare company, works to help people lead healthier, happier lives through access to high-quality mental healthcare. Talkspace pioneered the ability to text with a licensed therapist from anywhere and now offers a comprehensive suite of mental health services from self-guided products to individual and couples therapy, in addition to psychiatric treatment and medication management.

Talkspace currently holds a Zacks Rank #2. The Zacks Consensus Estimate for 2023 revenues indicates 18.1% growth from 2022. For 2024, the company is expected to report revenue growth of 8%.

Augmedix delivers advanced, ambient medical documentation and data solutions to healthcare systems, physician practices, hospitals and telemedicine practitioners. Augmedix's proprietary Notebuilder Platform extracts relevant data from natural clinician-patient conversations and converts that data into medical notes in real time, which are seamlessly transferred to the EHR.

Augmedix carries a Zacks Rank #2 at present. The Zacks Consensus Estimate for 2023 sales indicates year-over-year growth of 41.1%. For 2024, the company is expected to report revenue growth of 34.2%.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit  for information about the performance numbers displayed in this press release.

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