Digital health companies got pummeled by Wall Street in 2024 as industry adapts to post-Covid slowdown
If the Covid era marked a boom time for digital health companies, 2024 was the reckoning.
If the Covid era marked a boom time for digital health companies, 2024 was the reckoning.
In a year that saw the Nasdaq jump 32%, surpassing 20,000 for the first time this month, health tech providers largely suffered. Of 39 public digital health companies analyzed by CNBC, roughly two-thirds are down for the year. Others are now out of business.
There were some breakout stars, like Hims & Hers Health, which was buoyed by the success of its popular new weight loss offering and its position in the GLP-1 craze. But that was an exception.
While there were some company-specific challenges in the industry, overall it was a “year of inflection,” according to Scott Schoenhaus, an analyst at KeyBanc Capital Markets covering health-care IT companies. Business models that appeared poised to break out during the pandemic haven’t all worked as planned, and companies have had to refocus on profitability and a more muted growth environment.
“The pandemic was a huge pull forward in demand, and we’re facing those tough, challenging comps,” Schoenhaus told CNBC in an interview. “Growth clearly slowed for most of my names, and I think employers, payers, providers and even pharma are more selective and more discerning on digital health companies that they partnered with.”
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