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Doximity at the New York Stock Exchange for their IPO, June 24, 2021.

Source: NYSE

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.” 

In 2021, digital health startups raised $29.1 billion, blowing past all previous funding records, according to a report from Rock Health. Almost two dozen digital health companies went public through an initial public offering or special purpose acquisition company, or SPAC, that year, up from the previous record of eight in 2020. Money was pouring into themes that played into remote work and remote health as investors looked for growth with interest rates stuck near zero.

But as the worst waves of the pandemic subsided, so did the insatiable demand for new digital health tools. It’s been a rude awakening for the sector.  

“What we’re still going through is an understanding of the best ways to address digital health needs and capabilities, and the push and pull of the current business models and how successful they may be,” Michael Cherny, an analyst at Leerink Partners, told CNBC. “We’re in a settling out period post Covid.”

GoodRx signage on the outside of the Nasdaq on the day of its IPO, September 23, 2020.

Source: GoodRx

Progyny, which offers benefits solutions for fertility and family planning, is down more than 60% year to date. Teladoc Health, which once dominated the virtual-care space, has dropped 58% and is 96% off its 2021 high.

When Teladoc acquired Livongo in 2020, the companies had a combined enterprise value of $37 billion. Teladoc’s market cap now sits at under $1.6 billion.

GoodRx, which offers price transparency tools for medications, is down 33% year to date. 

Schoenhaus says many companies’ estimates were too high this year.

Progyny cut its full-year revenue guidance in every earnings report in 2024. In February, Progyny was predicting $1.29 billion to $1.32 billion in annual revenue. By November, the range was down to $1.14 billion to $1.15 billion.

GoodRx also repeatedly slashed its full-year guidance for 2024. What was $800 million to $810 million in May shrank to $794 million by the November.

In Teladoc’s first-quarter report, the company said it expected full-year revenue of $2.64 billion to $2.74 billion. The company withdrew its outlook in its second quarter, and reported consecutive year-over year declines.

“This has been a year of coming to terms with the growth outlook for many of my companies, and so I think we can finally look at 2025 as maybe a better year in terms of the setups,” Schoenhaus said.  

While overzealous forecasting tells part of the digital health story this year, there were some notable stumbles at particular companies. 

Dexcom, which makes devices for diabetes and glucose management, is down more than 35% year to date. The stock tumbled more than 40% in July – its steepest decline ever – after the company reported disappointing second-quarter results and issued weak full-year guidance. 

CEO Kevin Sayer attributed the challenges to a restructuring of the sales team, fewer new customers than expected and lower revenue per user. Following the report, JPMorgan Chase analysts marveled at “the magnitude of the downside” and the fact that it “appears to mostly be self-inflicted.” 

Genetic testing company 23andMe had a particularly rough year. The company went public via a SPAC in 2021, valuing the business at $3.5 billion, after its at-home DNA testing kits skyrocketed in popularity. The company is now worth less than $100 million and CEO Anne Wojcicki is trying to keep it afloat.

In September, all seven independent directors resigned from 23andMe’s board, citing disagreements with Wojcicki about the “strategic direction for the company.” Two months later, 23andMe said it planned to cut 40% of its workforce and shutter its therapeutics business as part of a restructuring plan. 

Wojcicki has repeatedly said she intends to take 23andMe private. The stock is down more than 80% year to date. 

Digital health’s bright spots

Products of Hims & Hers displayed.

Hims & Hers

Investors in Hims & Hers had a much better year.

Shares of the direct-to-consumer marketplace are up more than 200% year to date, pushing the company’s market cap to $6 billion, thanks to soaring demand for GLP-1s. 

Hims & Hers began prescribing compounded semaglutide through its platform in May after launching a new weight loss program late last year. Semaglutide is the active ingredient in Novo Nordisk‘s blockbuster medications Ozempic and Wegovy, which can cost around $1,000 a month without insurance. Compounded semaglutide is a cheaper, custom-made alternative to the brand drugs and can be produced when the brand-name treatments are in shortage.

Hims & Hers will likely have to contend with dynamic supply and regulatory environments next year, but even before adding compounded GLP-1s to its portfolio, the company said in its February earnings call that it expects its weight loss program to bring in more than $100 million in revenue by the end of 2025. 

Doximity, a digital platform for medical professionals, also had a strong 2024, with its stock price more than doubling. The company’s platform, which for years has been likened to a LinkedIn for doctors, allows clinicians to stay current on medical news, manage paperwork, find referrals and carry out telehealth appointments with patients. 

Doximity primarily generates revenue through its hiring solutions, telehealth tools and marketing offerings for clients like pharmaceutical companies.

Leerink’s Cherny said Doximity’s success can be attributed to its lean operating model, as well as the “differentiated mousetrap” it’s created because of its reach into the physician network. 

“DOCS is a rare company in healthcare IT as it is already profitable, generates strong incremental margins, and is a steady grower,” Leerink analysts, including Cherny, wrote in a November note. The firm raised its price target on the stock to $60 from $35. 

Another standout this year was Oscar Health, the tech-enabled insurance company co-founded by Thrive Capital Management’s Joshua Kushner. Its shares are up nearly 50% year to date. The company supports roughly 1.65 million members and plans to expand to around 4 million by 2027. 

Oscar showed strong revenue growth in its third-quarter report in November. Sales climbed 68% from a year earlier to $2.4 billion.

Additionally, two digital health companies, Waystar and Tempus AI, took the leap and went public in 2024. 

The IPO market has been largely dormant since late 2021, when soaring inflation and rising interest rates pushed investors out of risk. Few technology companies have gone public since then, and no digital health companies held IPOs in 2023, according to a report from Rock Health. 

Waystar, a health-care payment software vendor, has seen its stock jump to $36.93 from its IPO price of $21.50 in June. Tempus, a precision medicine company, hasn’t fared as well. It’s stock has slipped to $34.91 from its IPO price of $37, also in June.

“Hopefully, the valuations are more supportive of opportunities for other companies that have been lingering in the background as private companies for the last several years.” Schoenhaus said. 

Out with the old

The Nasdaq MarketSite is seen on December 12, 2024 in New York City. 

Michael M. Santiago | Getty Images

Several digital health companies exited the public markets entirely this year. 

Cue Health, which made Covid tests and counted Google as an early customer, and Better Therapeutics, which used digital therapeutics to treat cardiometabolic conditions, both shuttered operations and delisted from the Nasdaq. 

Revenue cycle management company R1 RCM was acquired by TowerBrook Capital Partners and Clayton, Dubilier & Rice in an $8.9 billion deal. Similarly, Altaris bought Sharecare, which runs a virtual health platform, for roughly $540 million.

Commure, a private company that offers tools for simplifying clinicians’ workflows, acquired medical AI scribing company Augmedix for about $139 million.

“There was a lot of competition that entered the marketplace during the pandemic years, and we’ve seen some of that being flushed out of the markets, which is a good thing,” Schoenhaus said.

Cherny said the sector is adjusting to a post-pandemic period, and digital health companies are figuring out their role.

“We’re still cycling through what could be almost termed digital health 1.1 business models,” he said. “It’s great to say we do things digitally, but it only matters if it has some approach toward impacting the ‘triple aim’ of health care: better care, more convenient, lower cost.”

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Tesla investors are growing wary of Elon Musk’s futuristic promises

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Tesla investors are growing wary of Elon Musk's futuristic promises

Tesla CEO Elon Musk speaks alongside U.S. President Donald Trump to reporters in the Oval Office of the White House on May 30, 2025 in Washington, DC.

Kevin Dietsch | Getty Images

At Tesla, vehicle sales are slumping, profits are thinning and revenue from regulatory credit sales are poised to dry up due to Republican-led policy changes.

In the past, CEO Elon Musk’s futuristic promises have convinced investors to look past top and bottom line numbers.

Not now.

Following another fairly dismal earnings report this week, Musk told analysts on the call that Tesla’s electric vehicles will soon become driverless, making money for owners while they sleep. He also said Tesla’s robotaxi service, which the company recently started testing in a limited capacity in Austin, Texas, will expand to other states, with a goal of being able to reach half the U.S. population by year-end, “assuming we have regulatory approvals.”

It didn’t matter.

Tesla shares plummeted 8% on Thursday as investors focused on the immediate challenges facing the company, including the rapid rise of lower-cost EV competitors, particularly in China, and a political backlash against Musk that harmed Tesla’s brand in the U.S. and Europe.

Automotive sales declined 16% year-over-year in the second quarter for the EV maker, with weak sales numbers continuing in Europe and California. Musk said there could be a “few rough quarters” ahead because of the EV credits expiring and President Donald Trump’s tariffs.

The stock bounced back some on Friday, gaining 3.5%, but still ended the week down and has now fallen 22% this year, the worst performance among tech’s megacaps. The Nasdaq rose 1% for the week and is up more than 9% in 2025, closing at a record on Friday.

“Look, we love robotaxis. And robots,” wrote analysts at Canaccord Genuity, who recommend buying Tesla’s stock, in a note after the earnings report. “Over time, Tesla is well positioned to benefit from these future-forward opportunities.”

The analysts, however, said that they’re focused on the profit and loss statement, writing: “But we love growth too, in the here and now. We need the P&L dynamics to turn.”

Analysts at Jefferies described the earnings update as “a bit dull.” And Goldman Sachs said Tesla’s robotaxi effort is “still small” with limited technical data points.

Tesla didn’t respond to a request for comment.

Canaccord Genuity's Gianarikas: We may have seen the bottom for Tesla, positive acceleration to come

Musk, who has previously called himself “pathologically optimistic,” has been able to sway shareholders and send the stock soaring at times with promises of self-driving cars, humanoid robots and more affordable EVs.

But after a decade of missed self-imposed deadlines on autonomous driving, Wall Street is watching Tesla fall behind Alphabet’s Waymo in the U.S. and Baidu’s Apollo Go in China.

In Tesla’s shareholder deck, the company said the second quarter marked the start of its “transition from leading the electric vehicle and renewable energy industries to also becoming a leader in AI, robotics and related services.” The company didn’t offer any new guidance for growth or profits for the year ahead.

Regulatory hurdles

Business Insider reported on Friday that Tesla told staff its robotaxi service could launch in the San Francisco Bay Area as soon as this weekend.

But Tesla hasn’t applied for permits that would be required to run a driverless ridehailing service in California, CNBC confirmed. The company would first need authorizations from the state’s Department of Motor Vehicles and the California Public Utilities Commission (CPUC).

The CPUC told CNBC on Friday, that under existing permits, Tesla can only operate a human-driven chartered vehicle service, not carry passengers in robotaxis.

Waymo driverless vehicles wait at a traffic light in Santa Monica, California, on May 30, 2025.

Daniel Cole | Reuters

On the earnings call, Musk and other Tesla execs claimed the company was working on regulatory approvals to launch in Nevada, Arizona, Florida and other markets, in addition to San Francisco, but offered no details about what would be required.

Within Austin, the company said its robotaxi service had driven 7,000 miles, and that Tesla has been restricting its robotaxis’ to roads with a speed limit of 40 miles per hour. The Austin service involves a small fleet of about 10 to 20 Model Y vehicles equipped with the company’s latest self-driving systems.

The Tesla robotaxis rely on remote supervision by employees in a customer service center, and a human safety supervisor in the front passenger seat, ready to intervene if needed.

Compare that to what Alphabet said on its second-quarter earnings call the same day as Tesla’s results.

“The Waymo Driver has now autonomously driven over 100 million miles on public roads, and the team is testing across more than 10 cities this year, including New York and Philadelphia,” Alphabet said. Meanwhile, Waymo has become significant enough that Alphabet added a category to its Other Bets revenue description in its latest quarterly filing.

“Revenues from Other Bets are generated primarily from the sale of autonomous transportation services, healthcare-related services and internet services,” the filing said. The Other Bets segment remains relatively small, with revenue coming in at $373 million in the quarter. 

Regardless of investor skepticism, Musk is more bullish than ever.

On Friday, the world’s richest person posted on his social network X that he thinks Tesla will someday be worth $20 trillion. On the earnings call earlier in the week, he said that when it comes to AI for cars and robots, “Tesla is actually much better than Google by far” and “much better than anyone at real world AI.”

CORRECTION: The Waymo Driver has now autonomously driven over 100 million miles on public roads, according to Alphabet. A previous version misstated the number of miles.

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Tesla plans ‘friends and family’ car service in California, regulator says

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Tesla plans 'friends and family' car service in California, regulator says

A vehicle Tesla is using for robotaxi testing purposes on Oltorf Street in Austin, Texas, US, on Sunday, June 22, 2025.

Tim Goessman | Bloomberg | Getty Images

In an earnings call this week, Tesla CEO Elon Musk teased an expansion of his company’s fledgling robotaxi service to the San Francisco Bay Area and other U.S. markets.

But California regulators are making clear that Tesla is not authorized to carry passengers on public roads in autonomous vehicles and would require a human driver in control at all times.

“Tesla is not allowed to test or transport the public (paid or unpaid) in an AV with or without a driver,” the California Public Utilities Commission told CNBC in an email on Friday. “Tesla is allowed to transport the public (paid or unpaid) in a non-AV, which, of course, would have a driver.”

In other words, Tesla’s service in the state will have to be more taxi than robot.

Tesla has what’s known in California as a charter-party carrier permit, which allows it to run a private car service with human drivers, similar to limousine companies or sightseeing services.

The commission said it received a notification from Tesla on Thursday that the company plans to “extend operations” under its permit to “offer service to friends and family of employees and to select members of the public,” across much of the Bay Area.

But under Tesla’s permit, that service can only be with non-AVs, the CPUC said.

The California Department of Motor Vehicles told CNBC that Tesla has had a “drivered testing permit” since 2014, allowing the company to operate AVs with a safety driver present, but not to collect fees. The safety drivers must be Tesla employees, contractors or designees of the manufacturer under that permit, the DMV said.

In Austin, Texas, Tesla is currently testing out a robotaxi service, using its Model Y SUVs equipped with the company’s latest automated driving software and hardware. The limited service operates during daylight hours and in good weather, on roads with a speed limit of 40 miles per hour. 

Robotaxis in Austin are remotely supervised by Tesla employees, and include a human safety supervisor in the front passenger seat. The service is now limited to invited users, who agree to the terms of Tesla’s “early access program.”

EV price war is bleeding into robotaxis, intelligent driving: Expert

On Friday, Business Insider, citing an internal Tesla memo, reported that Tesla told staff it planned to expand its robotaxi service to the San Francisco Bay Area this weekend. Tesla didn’t respond to a request for comment on that report.

In a separate matter in California, the DMV has accused Tesla of misleading consumers about the capabilities of its driver assistance systems, previously marketed under the names Autopilot and Full Self-Driving (or FSD).

Tesla now calls its premium driver assistance features, “FSD Supervised.” In owners manuals, Tesla says Autopilot and FSD Supervised are “hands on” systems, requiring a driver at the wheel, ready to steer or brake at all times. 

But in user-generated videos shared by Tesla on X, the company shows customers using FSD hands-free while engaged in other tasks. The DMV is arguing that Tesla’s license to sell vehicles in California should be suspended, with arguments ongoing through Friday at the state’s Office of Administrative Hearings in Oakland.

Under California state law, autonomous taxi services are regulated at the state level. Some city and county officials said on Friday that they were out of the loop regarding a potential Tesla service in the state. 

Stephanie Moulton-Peters, a member of the Marin County Board of Supervisors, said in a phone interview that she had not heard from Tesla about its plans. She urged the company to be more transparent.

“I certainly expect they will tell us and I think it’s a good business practice to do that,” she said.

Moulton-Peters said she was undecided on robotaxis generally and wasn’t sure how Marin County, located north of San Francisco, would react to Tesla’s service.

“The news of change coming always has mixed results in the community,” she said. 

Brian Colbert, another member of the Marin County Board of Supervisors, said in an interview that he’s open to the idea of Tesla’s service being a good thing but that he was disappointed in the lack of communication. 

“They should have done a better job about informing the community about the launch,” he said. 

Alphabet’s Waymo, which is far ahead of Tesla in the robotaxi market, obtained a number of permits from the DMV and CPUC before starting its driverless ride-hailing service in the state.

Waymo was granted a CPUC driverless deployment permit in 2023, allowing it to charge for rides in the state. The company has been seeking amendments to both its DMV and CPUC driverless deployment permits as it expands its service territory in the state.

— NBC’s David Ingram reported from San Francisco.

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Mark Zuckerberg names ex-OpenAI employee chief scientist of new Meta AI lab

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Mark Zuckerberg names ex-OpenAI employee chief scientist of new Meta AI lab

Meta CEO Mark Zuckerberg makes a keynote speech during the Meta Connect annual event, at the company’s headquarters in Menlo Park, California, on Sept. 25, 2024.

Manuel Orbegozo | Reuters

Meta CEO Mark Zuckerberg on Friday said Shengjia Zhao, the co-creator of OpenAI’s ChatGPT, will serve as the chief scientist of Meta Superintelligence Labs.

Zuckerberg has been on a multibillion-dollar artificial intelligence hiring blitz in recent weeks, highlighted by a $14 billion investment in Scale AI. In June, Zuckerberg announced a new organization called Meta Superintelligence Labs that’s made up of top AI researchers and engineers. 

Zhao’s name was listed among other new hires in the June memo, but Zuckerberg said Friday that Zhao co-founded the lab and “has been our lead scientist from day one.” Zhao will work directly with Zuckerberg and Alexandr Wang, the former CEO of Scale AI who is acting as Meta’s chief AI officer.

“Shengjia has already pioneered several breakthroughs including a new scaling paradigm and distinguished himself as a leader in the field,” Zuckerberg wrote in a social media post. “I’m looking forward to working closely with him to advance his scientific vision.”

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In addition to co-creating ChatGPT, Zhao helped build OpenAI’s GPT-4, mini models, 4.1 and o3, and he previously led synthetic data at OpenAI, according to Zuckerberg’s June memo.

Meta Superintelligence Labs will be where employees work on foundation models such as the open-source Llama family of AI models, products and Fundamental Artificial Intelligence Research projects.

The social media company will invest “hundreds of billions of dollars” into AI compute infrastructure, Zuckerberg said earlier this month.

“The next few years are going to be very exciting!” Zuckerberg wrote Friday.

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