Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Are Digital Health Valuations Overhyped Or Undervalued?

By Corinne Cardina - Nov 23, 2020 at 6:30AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A digital health CEO shares what investors need to know about stocks like Teladoc and Veeva Systems.

For many people, the coronavirus pandemic has changed their nutrition and exercise habits. One app helping people track their food and lose weight is called Lifesum. The company has scaled rapidly to 45 million users and boasts many impressive partnerships with popular tech companies.

Fool.com's Healthcare and Cannabis Bureau Chief Corinne Cardina chatted with Lifesum's CEO Henrik Torstensson about stocks in the digital health and wellness space including Teladoc ( TDOC -4.32% ) and Veeva Systems ( VEEV -4.92% )

 

Corinne Cardina: I'd like to talk a little bit more about the U.S. market in digital health. On Fool.com, we're investors, so we love to look at some of the public companies and the digital health companies, particularly in telehealth, that's been a big buzzword this year, we have been on a pretty wild ride since the pandemic began. The telehealth pioneer, Teladoc, is at more than 200% since the start of March, reflecting its record setting number of telehealth visits. There's Veeva Systems, which sells cloud software for life sciences companies, that's up 300% since March. Primary care chain One Medical, their parent company, 1Life Health ( ONEM -4.93% ), IPO'd earlier this year, it's up 30%. So, I'm loving all of your insight on the digital health industry and I would love to know, what do you think about these types of stocks? Are they overhyped? Are they fairly valued? Or do you think we're just seeing the beginning and so they're really trading at a bargain still?

Henrik Torstensson: I think that's obviously the million-dollar question. I can look at it as an operator. The healthcare market is enormous in itself. Digital is really happening. As with any market, when you have those two combinations and through demand from users and consumers, payers, there's going to be winners and losers. So then, you need to go in and look at individual companies. I have spent 110% of my time on operating Lifesum so I can't go in and say, this is going to be the winner, this is not going to be the winner. But I'd be extremely surprised if there aren't multiple winners in this sector.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Teladoc Health, Inc. Stock Quote
Teladoc Health, Inc.
TDOC
$92.43 (-4.32%) $-4.17
Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$3,389.79 (-1.38%) $-47.57
NIKE, Inc. Stock Quote
NIKE, Inc.
NKE
$170.24 (0.14%) $0.24
Veeva Systems Inc. Stock Quote
Veeva Systems Inc.
VEEV
$249.49 (-4.92%) $-12.92
1Life Healthcare, Inc. Stock Quote
1Life Healthcare, Inc.
ONEM
$15.44 (-4.93%) $0.80

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
624%
 
S&P 500 Returns
141%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/04/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.