The COVID-19 pandemic highlighted the sometimes fragile nature of the American healthcare system. Many people had to delay elective surgeries and forego other treatments for an extended period. Others were scared of going to a clinic for fear of exposure to the virus. This crisis showed us the value of telehealth stocks. Thanks to the rise in broadband internet and high-quality video calls, it can now host doctors’ visits online.
While telemedicine isn’t always the solution, sometimes a remote check-up can be easier than going into an office in person. As telemedicine continues to flourish, these three telehealth stocks stand to benefit.
Doximity (DOCS)
Doximity (NYSE:DOCS) is a software platform for doctors designed to offer physicians various services. It offers medical news and research, workplace collaboration, career management and other services within its platform.
The pandemic, however, highlighted another core feature: Virtual patient visits. Doximity’s mission is to turn a smartphone into a mobile medical office.
Doctors enrolled in Doximity can host telemedicine meetings with their patients. This feature is integrated into the broader Doximity platform they use for various purposes. This is a solid, unique value proposition compared to other telemedicine platforms, which only offer virtual patient meetings.
Thanks to its broader focus, Doximity has enjoyed a lot of natural buy-in from physicians. This has allowed it to grow while keeping marketing costs much lower than peers. As a result, Doximity is strongly profitable, unlike many of its rivals.
DexCom (DXCM)
Glucose monitoring equipment maker DexCom (NASDAQ:DXCM) is the largest holding in the Global X Telemedicine & Digital Health ETF (NASDAQ:EDOC). While many investors think of software platforms and ecosystems, DexCom speaks to the telemedicine opportunities for medical device makers.
DexCom makes devices for glucose monitoring throughout the day. Tracking blood sugar levels in real time lets doctors and patients see how things change as folks eat, exercise and engage in other activities that affect their readings.
This information, in turn, helps get medication levels right and improve patient outcomes. It is perfect for monitoring remotely via telemedicine rather than in-office. DexCom has already built the tools for doctors to use this information best in a remote setting. As telemedicine takes off, medical device makers like DexCom can profitably ride that wave.
CVS (CVS)
Pharmacy chain CVS (NYSE:CVS) has an interesting role in telemedicine.
While most people probably think of CVS as primarily a retail company, it is far more than that today. Through its acquisitions, CVS has taken a leading role in health insurance, pharmacy benefit management and other key roles in the industry.
CVS is already offering telemedicine through its website and phone app. This allows CVS to treat patients at home, virtually or in-store clinics. This all-in-one approach gives CVS a powerful position when interacting with patients.
And, thanks to its ownership in the insurance space, CVS can drive patient behavior and wring out maximum cost savings and efficiency from its telemedicine platform over time. This is thanks to its unparalleled scale within the industry.
On the date of publication, Ian Bezek did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
