The 3 Best Digital Health Stocks for Personalized Medicine

Alex Sirois

Sat, Nov 25, 2023, 7:45 AM 4 min read

If you’re searching for digital health stocks to add to your portfolio, look no further. Technological innovation is leading to the increased digitalization and personalization of healthcare. Personalized medicine is the use of an individual’s genetic profile in order to determine choices in their healthcare. That unique field of healthcare is also increasingly being digitized.

Results of tests that identify certain genetic predispositions of an individual are increasingly available with the click of a mouse. Healthcare practitioners, consumers, and investors are all very interested in the future of the field. Medicine is shifting from a one size fits all approach to a much more individualized future. Let’s look at three digital health stocks that appear to be very well positioned to benefit from those changes.

23andMe (ME)

A close-up shot of the saliva collection kit from 23andMe.

Source: nevodka / Shutterstock.com

23andMe (NASDAQ:ME) is a fairly prominent stock in the field of personalized medicine. The company is well known for its at home saliva tests that analyze an individual’s DNA. The DNA contained in saliva can be used to determine an individual’s ancestry as well as their genetic predisposition toward certain diseases.

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That information allows customers to understand certain traits that they possess. For example, 23andMe DNA tests reveal an individual’s ability to metabolize certain drugs. That’s useful information for a doctor to understand in potentially prescribing certain medications.

Those same DNA tests can reveal more serious information including carrier status and risk factors. Carrier status refers to a situation in which a person carries one or more genes associated with genetic disorders.

The company anticipates reporting between $240 and 250 million in revenues for the fiscal year which will end on March 31 of next year. Losses are expected to range between $325 million to $345 million. The company recently launched a new subscription called 23andMe+ Total Health, providing its most comprehensive data to date.

Exact Sciences (EXAS)

EXACT Sciences Corporation office exterior. EXAS stock.

Source: Tada Images / Shutterstock

Exact Sciences (NASDAQ:EXAS) produces and sells diagnostic and cancer screening tests. The company is best known for its Cologuard product. That said, Exact Sciences has several other revenue generating products and services.

Screening test revenue accounted for $472 million of the company’s $628.3 million in revenues during the most recent period. Overall revenues increased by 20% on a year-over-year basis, while screening revenue increased by a relatively higher 31% during the same period.

While the company is best known for Cologuard which allows non-invasive measurement of colon cancer risk, it also screens for other cancers. Exact Sciences’ screening tests are used in the detection of breast cancer as well as prostate cancer.

One of the more encouraging fundamental factors that favors an investment in Exact Sciences has to do with its profitability. The company reported $0.8 million in net income during Q3. A year earlier the company reported a $148.8 million net loss.

Fulgent Genetics (FLGT)

a visualization of DNA in a vial. TSHA stock

Source: Connect world / Shutterstock.com

Fulgent Genetics (NASDAQ:FLGT) markets itself as a provider of comprehensive genetic testing services that support personalized medicine. The company provides gene sequencing services that are used to identify a variety of diseases. These diseases include cancer, infectious diseases, rare diseases, and reproductive health. Additionally, Fulgent Genetics also offers testing to identify an individual’s response to certain medications.

The company also sells Covid-19 testing products which continue to account for a substantial amount of its revenues. In the most recent quarter, the company recorded $85 million in total revenues. Core revenue, which strips out Covid-19 sales, increased by 17% to $66 million.

The company’s EBITDA amounted to $18.1 million, but Fulgent Genetics continues to report overall losses. In fact, its net losses reached $11.7 million during the period.

The company offers more than 18,000 single gene tests and more than 900 rare disease tests. Analysts believe the company has roughly 15% upside based on current prices.

On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.