These Five Home Health Monitoring Stocks Tap Into an Under-the-Radar Technology Transition

Over the last several years, technology is one area of the stock market that outperforms frequently. Of course, tech stocks go through periods of underperformance, but they typically bounce back within a reasonable timeframe.

However, one of the challenges of picking tech stocks is selecting names that offer the potential for significant upside. If the COVID-19 pandemic has taught us anything, it's that major events can trigger or accelerate various technology trends, and there's one transition underway that hasn't yet gotten a lot of attention.

A tech-driven transition that's captured little attention so far

Traditionally, healthcare involved going to a doctor's office or hospital, receiving care there, and then picking up prescriptions and heading home, basically shelving the patient's care until the next time they see a doctor. However, new advances in technology are making an increasing number of medical-grade devices available for patients to use at home.

The growing market for these easy-to-use devices is in response to an under-the-radar transition that's underway now. In fact, multiple macroeconomic factors are contributing to this transition, which is a massive shift from in-office patient care to remote home health monitoring. The factors driving the transition to home health monitoring include lessons learned from the pandemic, a push by insurance companies to cut costs as healthcare expenses rise, and the aging U.S. population.

Thus, it should come as no surprise that the home health monitoring market is booming. One estimate pegs the global remote patient monitoring market at about $4.4 billion in 2022. The firm also predicts a compound annual growth rate of 18.5% through 2030, bringing the industry's value to $16.9 billion.

With such tremendous growth looking likely for the space, it may be a great place to look for stocks that could outperform in the coming years. Here are five stocks in the home health monitoring space that some investors may find to be worth considering.

Dexcom

Dexcom (DXCM) provides continuous glucose monitoring (CGM) for diabetic patients. The company's latest device provides real-time glucose readings without fingersticks or even scanning a device placed on the skin. Dexcom touts itself as "the #1 recommended CGM brand by people with diabetes and healthcare providers."

The company has sought to make its blood glucose monitoring devices as affordable as possible, with the average copay at around $40, although it claims many patients don't pay anything out of pocket. Critically, Dexcom has guided for a revenue growth rate of 17% to 21% in 2023, and the numbers show plenty of runway for growth.

One estimate puts the global diabetes device market at $26.7 billion in 2021, with a compound annual growth rate of 8.2% from 2022 to 2030, driven by technological advances and growing rates of obesity.

GE HealthCare Technologies

GE HealthCare Technologies (GEHC) is a global provider of medical devices that was spun off of General Electric, which has been going through a slimming-down process for a while. The company just went public in December, so there's not much stock history there. Additionally, GE HealthCare Technologies already trades at a market capitalization of $35.4 billion — even though it's unprofitable for now, as are most of the companies on this list.

Importantly, GE HealthCare Technologies does much more than home health monitoring, so it isn't a pure play on the sector like others on this list. In addition to home health devices, the company also offers imaging and ultrasound equipment and in-office technologies for use in healthcare settings. Thus, investors looking for a pure-play name in home health monitoring might consider other options on this list.

G Medical Innovations

G Medical Innovations (GMVD) touts itself as a "next-generation mobile health and digital health company that develops and markets clinical and consumer medical-grade health monitoring solutions." The company also provides end-to-end support for digital health projects. (Disclosure: The author is the CEO of Quantum Media Group, LLC. G Medical Innovations is a client of Quantum Media Group, LLC.)

G Medical's PRIZMA medical smartphone case is an FDA-cleared medical smartphone case that turns any smartphone into a medical monitoring device. The case provides continuous monitoring of the patient's vital signs and enables them to share their data with caregivers and physicians.

The company also offers PRIZMA-branded chargers and charger adapters and test kits that enable patients to collect samples at home and send them off to a lab. The test kits provide easy access to lab services without going into a doctor's office. Available kits include tests for the thyroid, colon cancer, allergies, fitness, heart health, weight loss, sleep and stress, skin, testosterone, perimenopause and postmenopause, fertility, nutritional health, inflammation, and more.

IRhythm Technologies

IRhythm Technologies (IRTC) offers a complete cardiac monitoring system called Zio, which is built around single-use monitors. The company claims to offer "superior clinical accuracy," an "exceptional patient experience," and a "lower cost of care."

IRythm's goal was to create a user-friendly heart monitor that offers continuous monitoring without disrupting the patient's life. The Zio monitor can be worn for up to 14 days, and iRhythm also provides a continuous-monitoring service for cardiac patients. After the monitoring period is up, the patient mails the device back to Zio, which then analyzes the data and sends a report to the patient's physician.

Notably, iRhythm Technologies shares are already up more than 30% year to date.

Medtronic

Medtronic (MDT) is similar to GE HealthCare Technologies in that it isn't a pure-play option in the home health monitoring space. The company also offers many devices and equipment for use in medical offices and hospitals, so many patients may be familiar with this brand name from simply seeing it on the devices in their doctor’s office. Medtronic trades at a market cap of $118.5 billion and generated almost $32 billion in revenue in 2022, so it's much larger than the pure-play options listed here.

Among Medtronic's home health monitoring devices is the FDA-approved MiniMed 780G system, which provides real-time insulin adjustments and corrections throughout the day and night. The company also utilizes artificial intelligence in some of its products and services.

Other potential plays on the space

One last competitor that's important to mention for the companies listed above is Biotelemetry, which was publicly traded but now is privately held after it was acquired by Philips (PHG).

Other healthcare behemoths like Honeywell (HON) and Johnson & Johnson (JNJ) also offer devices for home health monitoring. However, they are far from being pure-play options in the industry because they sell many consumer-oriented and even non-healthcare products.

Overall, Medtronic offers products and services that target a wide array of health conditions ranging from airway and lung problems to brain conditions, digestive problems, ear, nose, and throat issues, chronic pain, and heart problems.

Investing in home health monitoring stocks

Overall, there are macroeconomic reasons it could make sense to invest specifically in the technology companies that offer devices for the home health monitoring space. Of course, the sector's rapid sales growth is just one piece of the puzzle that stems from these other positive trends.

For example, the rapidly aging population due to steadily declining fertility rates and increased life expectancy means more and more patients are needing home health monitoring for a variety of serious illnesses.

Additionally, there's no denying that the COVID-19 pandemic changed the world forever. Because of the pandemic, doctors and patients learned that patient care could be done at home because healthcare facilities were largely closed to in-office appointments.

Importantly, insurance companies learned this lesson too, and many are now pushing toward at-home care and continuous home health monitoring because it cuts costs. This is critical at a time when healthcare expenses are skyrocketing due to inflation.

Finally, all these macroeconomic trends are accelerating the technology-driven transition to home health monitoring, an investment idea that isn't getting a lot of attention yet.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.