When Hims & Hers Health shook the obesity drug market with its much-sought Wegovy knockoff, a spotlight flashed on what had been a beleaguered telehealth market. Now, the telehealth industry is facing gargantuan market-size estimates that have sent some stocks on a meteoric rise in 2025.
Telehealth offers a rare opportunity to flip the paradigm in health care, experts say. Telehealth uses technological solutions like phones, tablets and computers to access health care remotely. Patients can speak with doctors, undergo monitoring and take some tests, like blood tests, all from home. And the industry is expanding at a critical time. A severe shortage of health care professionals became worse during the pandemic. Some communities have little to no access to brick-and-mortar services.
Today, the telehealth market is worth an estimated $186 billion. But it's expected to grow fourfold over the next seven years. That's in part due to the advent of weight-loss drugs and low-cost knockoffs spurring motivated patients to seek health care solutions from the comfort of their homes.
Justin Schreiber, chief executive of LifeMD, estimates that about half the U.S. population doesn't have a good relationship with a primary care provider.
"They're going to the internet," Schreiber told Investor's Business Daily. "There's a massive shortage of primary care providers across the country. The only solution to solving this crisis are technology-driven health care primary delivery platforms."
LifeMD hopes to change that as the "Costco or Amazon Prime" of telehealth, Schreiber said. The company helps connect patients with primary and specialty doctors, as well as urgent care providers. It operates through a subscription model.
Telehealth Industry Growth And Key Stocks
Telehealth is growing rapidly with projected annual growth of 24% from 2023 to 2030, according to Grand View Research. So, investors are paying attention.
But the industry isn't spreading its gains evenly.
LifeMD, which launched in the 1990s as a drug developer, was on a hot streak from March through June. The company's shares almost tripled after LifeMD inked a deal with Novo Nordisk, allowing the telehealth player to sell weight-loss drug Wegovy in a subscription bundle.
But shares plummeted almost 45% on Aug. 6 after LifeMD's second-quarter earnings disappointed. LifeMD stock now has a poor IBD Relative Strength Rating of 12. The RS Rating pits a stock's 12-month performance against all other stocks. This puts LifeMD in the bottom one-fifth.
Fresh off its initial public offering, Omada Health shares fell in the aftermath of its mixed second-quarter report. Omada helps patients manage chronic care conditions. The stock has an RS Rating of 75, having mounted a slow comeback. Former Covid darling Teladoc Health, which connects patients with doctors online, has a poor RS Rating of 24.
Hinge Health, a virtual physical-therapy company, has had a powerful run since its June-quarter earnings report. Shares have a strong RS Rating of 91 after breaking out of an IPO base with a buy point at 43.80. Hinge stock is now about 30% above that breakout point.
Hims Stock Is On A Rollercoaster Ride
Then there's Hims & Hers, whose shares have been on a roller coaster recently.
Hims stock catapulted 23% in April after the company inked a deal with Novo to sell Wegovy with a bundled Hims membership.
But the companies parted ways in a high-profile spat that came to a head on June 23. Novo accused Hims of selling "illegitimate, knockoff versions of Wegovy that put patient safety at risk." Hims hit back by claiming that Novo tried to steer the telehealth platform into selling branded Wegovy "regardless of whether it was clinically best for patients." The fight sent Hims stock crashing almost 35%.
This week, Hims stock tumbled after the Food and Drug Administration sent a warning letter, accusing the company of making "false or misleading" claims.
Despite these challenges, Hims stock has more than doubled this year. The shares have a strong RS Rating of 93 and a slightly higher Composite Rating of 97. The latter statistic measures a stock's fundamental and technical growth metrics. The stock just retook its 50-day moving average after a failed breakout on July 31, according to MarketSurge.
Behind Rise Of Hims Stock Rise, Weight Loss Is Just One Driver
Hims & Hers' success is not tied only to weight-loss drugs, the company argues. Instead, the company is banking on the growing importance of technology in providing health care remotely.
"Nearly every critical industry has become easier, more affordable, and simpler to find the best option for your unique situation — except for health care," a Hims spokesperson said in an email to IBD. "Customers now expect choice, price transparency, and a wide selection of options when they seek care, similar to how they might expect the same when finding a banking institution."
This desire for easily accessible health care is "only going to increase," she said.
While the weight-loss craze turned the spotlight on Hims, the company actually started with a broader focus on men's health. Hims connects patients with doctors in four areas: dermatology, sexual health, weight loss and mental health.
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Telehealth's Key Advantage
The company helped highlight what experts say is a key advantage of telehealth: addressing the stigma associated with conditions like obesity and sexual health problems. The industry is poised to cover even more conditions, expanding to include just about everything that doesn't require an emergency room visit.
"We are taking more control of our health care and the innovation that is out there," Julie McGuire, a managing director at the advisory firm BDO Center of Healthcare Excellence and Innovation, told IBD. "It will be interesting to see what devices come and what problems have we not solved — yet."
Hims says "stigma and shame were the tip of the iceberg."
"Once individuals felt empowered to seek care, they also felt empowered to seek the best care for their unique experience," the Hims spokesperson said. "Our platform was built to deliver that."
How Telehealth Companies Can Succeed
The key for telehealth companies like Hims is connecting with and developing "sticky customers," said KeyBanc Capital Markets analyst Scott Schoenhaus.
Take customers of the Hims platform. Weight-loss drugs get them in the door. But a patient who wants a GLP-1 drug for weight loss may also need a blood test to check for related conditions. Some companies will even ship those tests to your doorstep.
In other words. telehealth companies can use their platforms to push patients into new areas and to address other health needs. This business model can get a boost from an important tech trend: artificial intelligence.
AI can help telehealth companies aggregate patients' data to identify risks of conditions that may not be on their radar. Obesity carries a number of comorbidities, including risks of type 2 diabetes, cardiovascular conditions, sleep apnea, osteoarthritis and even mental health concerns like depression.
AI can spot "the indications of something that a doctor or someone else might miss," Schoenhaus said.
AI-Powered Health Care
Artificial intelligence plays a key role on the Hinge platform. The company uses the technology to track patients' movements and even help run them through physical therapy exercises.
The platform uses a proprietary tracking technology based on a dataset of more than 1 million treated members, 74 million sessions and 32 million member-reported outcome logs, William Blair analyst Ryan Daniels said in a June report to clients.
Using AI, Hinge Health has been able to "automate care delivery (reducing the number of human care team hours associated with traditional PT by about 95%)," Daniels said.
In fact, Hinge Health offers a prime example of the bull case for telehealth, which has prompted the company's stock to take off. The virtual health company launched its IPO at $32 per share in May. Since then, shares have shot almost 80% higher.
Telehealth And The Question Of Access
Jayne Hornung, chief clinical officer for health care technology firm MMIT, underlined a key benefit: Many patients don't like the rigmarole associated with visiting their doctor. Full-time workers, parents and other caregivers might not have the time for traditional doctor appointments.
"My physician is an hour and 10 minutes away, and the last time I was there she said we could do these visits by telehealth," Hornung told IBD. "I would love to do that."
Telehealth can help patients overcome barriers, says McGuire, of BDO. For Hornung, the doctor's office requires a long drive. Others might have physical mobility issues or have to drive to multiple specialists. The shortage of health care professionals also is a factor. Offices are often crowded with long backlogs to see a doctor.
Telehealth can't solve all of these challenges, but it can ease some of them.
Taking Down Barriers For Patients
"Telemedicine is revolutionizing health care by breaking down barriers," McGuire said. "It helps them get access so that they can get the care that they need and they can receive that regular care from home."
Stigma can be a hurdle for some conditions that telehealth is trying to address, says Joe Perekupka, chief executive of Freespira. Freespira is a privately held company that uses an at-home treatment to address the symptoms of panic attacks and post-traumatic stress disorder, or PTSD.
Panic attacks and PTSD carry additional challenges, he says. Patients first must acknowledge there's a problem. Then, they have to seek treatment — a difficult proposition in today's world. Many states are facing a shortage of mental health care providers. According to the American Counseling Association, 47% of the U.S. population in 2022 was living in an area with too few mental health workers.
Telehealth helps solve that. People can receive treatment in the comfort of their own homes.
LifeMD Vision Of Health Care Membership
"The stigma piece, especially in mental health, is really high," Perekupka told IBD. "So, the key is, how do you remove barriers, self-imposed barriers that people put in front of them that stop them, prevent them from getting care? And whether it's a GLP-1 or an erectile dysfunction product or a mental health product, all the barriers around stigma can be the same, right?"
Schreiber, the CEO of LifeMD, says the secret sauce will be when companies figure out how to provide comprehensive care across multiple conditions — that so-called "sticky customers" paradigm mentioned by Schoenhaus, the KeyBanc analyst.
The company is now working on its LifeMD Plus platform, which Schreiber touts as the health care version of Costco or Amazon.com's Prime. LifeMD Plus is a membership program for $19 a month. Patients can pay cash or use their insurance, and always have access to a primary care provider.
"It's like having a doctor in the family," Schreiber said.
He imagines a future where patients can be monitored remotely from home via wearable products and submit blood work from systems shipped right to their doors. Access will include branded drugs, supplements and lifestyle offerings like hormone therapy.
"Nobody has done a great job, including Ro and Hims, at bringing all of this together on one platform," Schreiber said. "And, you know, having a price where it's a no-brainer — kind of like a Spotify or Costco price point. ... I think whoever figures that out, that's the holy grail of the virtual care world."
Ro.co is another weight-loss-focused telehealth platform.
Medicare Reimbursement Of Telehealth Care
But reimbursement remains a challenge for telehealth companies.
In March, Congress extended certain Medicare telehealth flexibilities until Sept. 30. Though advocates are pushing to make Medicare coverage of telehealth services permanent, there's no guarantee they'll succeed.
Some companies, though, say reimbursement hasn't been much of a challenge. Hinge Health has more than 50 partners and relationships with the top five health plans in the country, including the top three pharmacy benefit managers, says William Blair's Daniels.
Proponents say prevention is the best means of saving the health care system money. But it's hard to estimate how many dollars will be saved by patients who don't develop obesity, heart disease, diabetes or arthritis.
Telehealth Management Of Chronic Diseases
Omada Health works with patients who have chronic diseases in between doctor's visits. Patients can connect with health advisors and enroll in programs to help manage conditions like obesity and diabetes.
Wei-Li Shao, the firm's president, says Omada's efforts help save the health care system money. This is important in the U.S., where health care spending accounts for almost 20% of gross domestic product.
Similarly, LifeMD's Schreiber says better management of chronic conditions could save the health care system an "unbelievable amount of money." He estimates 80% of health care spending in the country is tied to chronic conditions.
"The reason why that number is just so atrocious is because of the access piece," he said. When "people don't have access to great care, compliance is not good. What we can do through virtual platforms is hopefully a lot better than what we're doing in the brick-and-mortar environment."
Hims Stock And Telehealth Growth
Though the industry still has work to do, telehealth clearly has grown since Covid and the advent of weight-loss drugs.
William Blair's Daniels estimates that Hinge Health has a total addressable market of $27 billion — and that's just for one company in the physical therapy space. Similarly, JPMorgan analysts say Omada Health, in the chronic conditions space, is eyeing a $135 billion opportunity that's only minimally penetrated today.
But the whole telehealth enchilada?
Markets and Markets expects telehealth to grow to nearly $181 billion over the next five years. Grand View Research pegs it at $250 billion by 2030. Fortune Business Insight is even more bullish, projecting a market size of $791 billion by 2032.
Not A Silver Bullet
Not everything can be done via telehealth, of course. Hospitals and emergency rooms will still operate in the acute care segment.
In other words, you can't treat a heart attack via Zoom.
But the reality is that most people don't need to go to a doctor for an annual physical, especially if they're healthy and just looking to do a check-in, says Schreiber, of LifeMD.
"I think it's just going to take time for people to realize that they can actually achieve better care, more convenient care, more affordable care online vs. going in to their brick-and-mortar provider," he said. It's just "a little bit early."
Follow Allison Gatlin on X/Twitter at @AGatlin_IBD.
