CRISPR Therapeutics (CRSP 1.11%) and Teladoc Health (TDOC 2.46%) both score a win when it comes to innovation in healthcare. CRISPR has developed a gene-editing approach that aims to fix faulty genes responsible for disease. Teladoc leads in telemedicine, allowing patients to visit doctors from the comfort of an armchair at home.
These companies are driving significant positive change in the world of healthcare. Last year, though, this idea didn't boost their shares. CRISPR and Teladoc dropped in the double digits.
These days, the stocks are recovering -- and you may be thinking of hopping onboard. But if you could only buy one of these growth stocks, which one should you choose?
The case for CRISPR Therapeutics
CRISPR has reached its most exciting moment ever. The biotech company has completed regulatory submissions for what may become its very first product. I'm talking about exa-cel, a gene-editing candidate for blood disorders beta thalassemia and sickle cell disease.
This is a big deal for CRISPR for a couple of reasons. First, it represents revenue -- and not just a small bit of revenue. Today, treatment options are limited for these particular blood disorders. And exa-cel is designed as a one-time curative treatment.
The candidate could become a blockbuster. This represents significant revenue for CRISPR -- even though it shares revenue with partner Vertex Pharmaceuticals.
Second, an exa-cel win would represent a vote of confidence for CRISPR'S technology -- one that's used throughout its pipeline. This could spur companies to license CRISPR'S technology and investors to buy CRISPR shares. As it stands, Vertex, clearly impressed by CRISPR'S gene editing, licensed the company's technology for work on its type 1 diabetes program.
CRISPR also is progressing with other candidates. For example, it's now enrolling and dosing patients in a phase 2 trial of immuno-oncology treatment CTX-110. This trial may support a regulatory submission.
CRISPR shares have climbed 61% this year. So some of the potential good news ahead may be baked in at these levels. But CRISPR stock still is far off its previous high -- and that was at a time when the company was much farther from product commercialization.
The case for Teladoc Health
Teladoc Health had a difficult year in 2022. The company posted billions of dollars in non-cash goodwill impairment charges linked to an acquisition a couple of years earlier.
Investors already had been worried about Teladoc's lack of profitability. And this deepened those worries.
But the good news is that signs are pointing to a brighter future -- and potential profitability -- ahead. The telemedicine giant shifted its strategy earlier this year to focus on growing revenue and favoring profit.
The company pledged to "balance growth and margin with an increased focus on efficiency going forward." Part of this included matching costs to the pace of growth. As a result, Teladoc cut some jobs and office locations.
In the most recent earnings report, consolidated revenue and consolidated adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) both beat Teladoc's guidance. Revenue from the BetterHelp mental health business climbed in the double digits and surpassed expectations. And revenue from the integrated care business -- these are plans sold to companies and organizations -- came in at the high end of guidance.
Though Teladoc is cutting costs, it continues to invest in key growth areas. It recently launched new provider-based weight management and prediabetes programs. These allow members to work directly with a Teladoc doctor who will design a treatment plan for them using Teladoc services.
This could represent a key growth area. More than 80% of Americans say they've tried one weight loss method, according to a Cleveland Clinic survey.
In spite of some recent gains, Teladoc shares still trade around their lowest ever in relation to sales right now.
TDOC PS Ratio data by YCharts.
CRISPR or Teladoc?
Both of these stocks offer growth potential down the road and seem reasonably priced today. But if I had to choose only one to buy, I'd go for Teladoc. CRISPR still has plenty of long-term potential, but as mentioned above, some of the possible good news ahead may be reflected in the share price today.
Teladoc shares don't yet reflect the progress the company has made so far this year -- or its prospects over time. That's why I would consider getting in on the Teladoc story right now, before the stock takes off.
