If you had to bet on two “big picture” sectors to invest in for the long haul, you can’t go wrong with technology or healthcare. Both are omnipresent and, in their own ways, on the cutting edge of global innovation that cement their longevity as investable opportunities. But combine the two into healthcare technology stocks, and you’re looking at massive upside potential.
Of course, snagging industry-wide trends is best done through ETF investing. For HealthTech exposure, it’s hard to beat a well-rounded healthcare ETF like the iShares Global Healthcare ETF (NYSEARCA:IXJ) combined with a speculative biotech ETF like the iShares Genomics, Immunology, and Healthcare ETF (NYSEARCA:IDNA). But playing stock jockey is more fun, and, in both cases, high expense fees eat into your overall gains.
If you want to snag the best-in-class healthcare technology stocks for 2024 rather than playing it safe with wide-ranging HealthTech ETFs, it’s hard to beat these three top stocks.
Crispr Therapeutics (CRSP)
Crispr Therapeutics (NASDAQ:CRSP) made waves earlier this month as its sickle cell treatment, Casgevy, became the first gene-editing therapy approved by the FDA. The implications, of course, are staggering. FDA approval for an ailment as serious as sickle cell opens the floodgates for long-term gene editing and CRISPR tech treatments, ranging from complex chronic diseases to routine wound repair. But, though the implications are staggering, CRSP shares dropped nearly 15% since the announcement.
Investors’ lack of enthusiasm is primarily due to Casgevy’s short-term operational and financial implications rather than what the approval stands for conceptually. Casgevy’s price tag, more than $2 million, is steep. At the same time, the total US addressable market stands at just 100,000 afflicted with sickle cell. Though the treatment will be life-changing to those receiving it, the high cost and limited marketability mean drug sales won’t come close to matching the high R&D costs it took to get Crispr to this point.
But if you’re investing for the long haul, finding tomorrow’s revolutionary healthcare technology stocks is as simple as loading up on CRSP. The company’s tech is now proven safe enough for wide distribution and stands as a watershed moment in the industry.
Teladoc Health (TDOC)
Teladoc Health (NYSE:TDOC) was a victim of mid-pandemic exuberance as it, like other stocks tailor-made for the era such as Peloton (NASDAQ:PTON) and Zoom Video Communications (NASDAQ:ZM), skyrocketed before falling back to earth at a fraction of past highs. TDOC, in particular, trades more than 90% below past highs. But that fall from grace isn’t an indictment of Teladoc’s model or viability. And, while it may not reach past highs anytime soon, investing in Teladoc today is a way to capture an expanding segment of healthcare technology stocks.
Telehealth proved viable during the pandemic, and remote physician care is here to stay. Today, more than 20% of adult patients use telehealth as an alternative to in-person visits. What’s more, usage trends accelerate with aging, as 43% of patients 65 or older use remote medicine services compared to just 29% within the 18 – 29 range. The national population is aging rapidly, which, if trends hold, means telemedicine will keep pace and become more prevalent.
Teladoc’s market share has lots of room to improve. But there’s an important consideration when looking at rankings. Teladoc is edged out by Zoom and Cisco Systems (NASDAQ:CSCO). But those are just generalist platforms, and within telemedicine-focused remote platforms, Teladoc is neck-and-neck with direct competitors Amwell (NYSE:AMWL) and Doxy.me. But systems will become increasingly niche, not more generalized, and it only takes one data leak or HIPAA lawsuit to shut down Zoom and other broad-spectrum platforms’ forays into healthcare. As medical needs evolve, so do delivery and interaction mechanisms, making Teladoc one of the best healthcare technology stocks for 2024.
Intuitive Surgical (ISRG)
Intuitive Surgical (NASDAQ:ISRG) captures another long-term healthcare trend, increased reliance on robotics during surgical procedures. ISRG is unique compared to the other two healthcare technology stocks on the list because, unlike CRSP or TDOC, ISRG is far from a speculative play. ISRG is a healthcare technology giant in the NASDAQ-100 and S&P 500.
Despite its relative overvaluation, analysts are nearly all bullish on ISRG. Of those polled, 19 called the stock a buy. Notably, none say the stock is worth selling with the remainder of analysts calling ISRG a hold. Consensus forecasts average $331.91, but the disparity between forecasts is broad. One research firm, EquitySet, staking $409 as a fair price target, putting shares 18% undervalued at current levels.
The most recent quarter unveiled bullish trends for ISRG, increasing tailwinds. Over the period, procedures leveraging ISRG’s proprietary surgical robotics platform climbed 19%, marking a 17% CAGR since 2019. At the same time, both revenue and income skyrocketed at 12% and 29%, respectively. If you want to anchor a basket of healthcare technology stocks, a stable but innovative giant like Intuitive Surgical stands as a strong cornerstone.
On the date of publication, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
