Despite a significant dip in COVID-19 cases worldwide, the demand for telemedicine is expected to remain strong owing to rising chronic diseases and an aging population. The sheer convenience of telemedicine makes it a popular choice for many consumers. So, Wall Street analysts expect telemedicine stocks Hims & Hers Health (HIMS) and American Well (AMWL) to gain more than 75% in price in the coming months. Read on.
The telemedicine industry has registered significant gains throughout the COVID-19 pandemic. And despite a dip in COVID-19 cases worldwide, the industry is expected to continue witnessing strong demand as people opt for telemedicine facilities for everyday medical needs and extended COVID-19 therapy in the new normal.
Amid an aging population and an apparent surge in chronic diseases, the convenience of telemedicine has made the service very popular. According to Markets and Markets, the global telehealth and telemedicine market is projected to reach $285.70 billion by 2027, growing at a 26.6% CAGR.
Wall Street analysts expect telemedicine stocks Hims & Hers Health, Inc. (HIMS) and American Well Corporation (AMWL) to rally more than 75% in price in the coming months. So, it could be wise to add these stocks to one’s watchlist.
Hims & Hers Health, Inc. (HIMS)
San Francisco-based HIMS operates a multi-specialty telehealth platform that connects consumers to licensed healthcare professionals. The company offers a range of health and wellness products and services and provides prescription medication and medical consultation services.
On Feb. 15, 2022, HIMS formed a partnership with GNC Holdings, LLC (GNC) to offer consumers health and wellness solutions at select GNC stores and online. Melissa Baird, HIMS’ Chief Operating Officer, said, “Our mass retail expansion is about building a trusted, nationwide brand for health and wellness products. Our partnership with GNC is a continuation of that strategy and we’re excited for consumers to now have even easier access to our products.”
HIMS’ online revenue came in at $78.31 million for the fourth quarter, ended Dec. 31, 2021, up 95.3% year-over-year. Its total revenue came in at $84.70 million, up 104.3% year-over-year. Also, its gross profit was $62.10 million, up 94.7% year-over-year.
For its fiscal year 2022, analysts expect HIMS’ revenue to be $377.88 million, representing a 39% year-over-year rise. The company’s EPS is expected to increase 56% in 2022. The stock closed yesterday’s trading session at $4.54. And Wall Street analysts expect the stock to hit $8.00 in the near term, which indicates a potential 76.2% upside.
American Well Corporation (AMWL)
AMWL in Boston operates as a telehealth company that enables digital delivery of care for healthcare. The company believes that digital care delivery will transform healthcare.
On Feb. 24, 2022, Dr. Ido Schoenberg, Chairman and CEO, said, “During 2022, we expect to complete the build out of Converge and begin to normalize our recent Converge-related R&D expenditures. We will also strive to resume our bookings momentum as we migrate existing customers to the platform, incorporate new modules of care, and drive new customer bookings. We believe this will result in a mix shift to margin rich revenue growth and ultimately, EBITDA profitability.”
For the fourth quarter, ended Dec. 31, 2021, AMWL’s revenue came in at $72.75 million, up 20.4% year-over-year. Its subscription revenue increased 14.4% year-over-year to $30.10 million. Furthermore, its net loss came in at $47.91 million, compared to a $50.59 million loss in the prior-year period.
Analysts expect AMWL’s revenue to increase 19% year-over-year to $333.86 million in its fiscal 2023. Its EPS is expected to increase 37.9% per annum for the next five years. In addition, it surpassed the Street’s EPS estimates in each of the trailing four quarters. The stock closed yesterday’s trading session at $3.53. Wall Street analysts expect the stock to hit $6.83 in the near term, which indicates a potential 93.5% upside.
HIMS shares were trading at $4.30 per share on Friday morning, down $0.24 (-5.29%). Year-to-date, HIMS has declined -34.35%, versus a -10.36% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master’s degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
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