Five Stocks That Tap Into the Exploding Market for At-Home Lab Testing

Traditionally, patients only got lab work done when a doctor ordered a test, but today, a growing number of patients are opting to get tests done on their own without an order from a doctor. More and more companies are starting to offer kits for these lab tests across a wide array of areas, from basic wellness checks to screening for specific illnesses and more.

This trend of at-home lab testing had its roots in the COVID-19 pandemic. During the pandemic, broad-based lockdowns around the world caused sweeping changes that shook the foundations of society as a whole. Healthcare, in particular, was forced to change dramatically because suddenly, people needed to receive care in their homes.

As a result, new ways of doing things were developed and approaches that once were the exception became the rule, creating new and suddenly exploding markets in various industry niches.

Investment opportunities in at-home lab testing

Health care relies heavily on diagnostic lab testing. In fact, according to the Centers for Disease Control and Prevention, 14 billion lab tests are ordered every year, and 70% of all healthcare decisions are based on diagnostic testing.

When the pandemic shuttered labs around the world, it created new opportunities for both up-and-comers and established healthcare giants to create new revenue streams. In fact, one recent estimate pegged the at-home testing market at $16.7 billion in 2021 with a projected compound annual growth rate of 10.5% between 2022 and 2031, making it worth over $45.6 billion.

Here are five at-home lab testing stocks that stand to benefit from the trends discussed. While many companies in the space are privately held, those that are publicly traded tend to be at either extreme of the capitalization range.

Cue Health

With a market capitalization of $66.6 million, Cue Health (HLTH) is at the smaller end of the spectrum. In March, the company launched a new lineup of 13 tests after making a name for itself with an at-home test for COVID-19, which utilizes a $200 machine.

However, the new kits aren't compatible with that machine and will instead be processed at a lab, which will make the results available on the Cue Health app. Cue Health continues to work on additional tests for its machine based on current market demand. Among the test kits under development are a flu test, a combination flu and COVID-19 test, and an Mpox test. Cue Health is also conducting clinical trials on tests for RSV, gonorrhea, chlamydia, other sexually transmitted diseases and strep.

G Medical Innovations

G Medical Innovations (GMVD), known for its remote patient monitoring services, recently launched its at-home lab testing kits, which is a new area of business for the company (Disclaimer: G Medical is a client of Quantum Media Group, LLC). G Medical is the only company currently offering both remote monitoring of vital signs and lab tests to provide a complete picture of the patient’s condition.

The kits, expected to become available in mid-September, span general wellness, nutritional health, men's and women's health, and sexual health. The many general wellness offerings include a thyroid test, testosterone test, vitamin D test, an extensive fitness test, and a weight loss test.

G Medical also offers several tests for women's health, including a fertility test and post-menopause and perimenopause tests. Under nutritional health, some of the kits include an inflammation test, metabolism test, food sensitivity test, and more. According to G Medical, patients will receive the results of their tests within days of their sample arriving in its lab after review by a physician. If necessary, the doctor will contact the patient for a consultation following the results. Patients can view their results and other information in the electronic medical record created by G Medical by logging into their patient portal.

Laboratory Corp. of America Holdings

With a market cap of around $18.9 billion, Labcorp (LH) is one of the largest diagnostic testing companies in the U.S. The company released its first at-home lab testing kits in 2022, and Labcorp OnDemand offers over 50 different lab tests that patients can order themselves.

The tests are grouped under allergy, annual wellness, diabetes, COVID-19, general health, fertility and sexual health, nutrition and vitamin health, and immunity and infectious disease. For example, patients who wonder why they're tired all the time can order a fatigue test to help them understand whether any imbalances or deficiencies may be behind their chronic tiredness.

The way Labcorp OnDemand works is simple. Patients order the lab test they want online, even without a doctor's visit, and they register the kit when placing their order. Labcorp offers both at-home and in-person lab tests, each of which comes with instructions for collecting the required sample. The results are available online in the patient's Labcorp Patient account. In the case of urgent tests or results, patients will also be contacted via phone or mail.

Quest Diagnostics

Quest Diagnostics (DGX) is another widely known laboratory company, and it actually got into the at-home lab testing market in 2018, when it launched QuestDirect. QuestDirect is a consumer-initiated testing service that enables patients to manage their own healthcare by ordering their own health and wellness lab tests directly from Quest.

The company's test kits cover general health, men's and women's health, digestive health, heart health, sexually transmitted disease testing, and tests for infectious diseases. Patients visit the website to order the tests they want, and independent physicians provide oversight and order the test if necessary.

Patients can also make an appointment online to get their sample drawn at one of Quest's labs. Most test results are available within a week and accessible via the patient's MyQuest portal, which they can share with their doctor or a family member using the My Circle feature. Quest also works with some companies that have mobile phlebotomists who visit the patient's home to draw their blood.

Thorne HealthTech

Thorne HealthTech (THRN) is known for the supplements it sells, but it also offers at-home lab tests. With a market cap of around $323 million, Thorne offers a small number of at-home tests and health panels.

The company's best-selling tests include its stress test and its gut health test with microbiome wipe. Thorne also offers a biological age health panel, an essential health panel and an advanced health panel. Other tests available from Thorne include a weight management test, menopause test and fertility test.

So far, it looks like the company offers fewer tests than the others on this list, but its supplement business adds a unique angle to this stock.

Privately held at-home lab test companies

During the pandemic, numerous companies rushed into the at-home lab testing space. Unfortunately, many of them lacked staying power and ended up declaring bankruptcy not long after.

However, in addition to the small- and micro-cap companies on this list, many other smaller companies have also found success in the space and remain stable. For example, one of the more well-known privately held companies that has done well in at-home lab testing is EverlyWell, which rose to fame after its appearance on the TV show Shark Tank, where it attracted an investment from Lori Greiner. Other private names offering at-home testing include Life Extension and Healthy.io.

Investing in the at-home lab testing market

Aside from patients' increased interest in collecting lab samples in the comfort of their own homes, other drivers of the at-home testing market include the rising prevalence of chronic diseases and the expansion of at-home testing kits for disease diagnosis. Other factors include the general public's increasing knowledge of at-home testing and improving health awareness.

With the large number of companies that have entered the at-home testing market and since the failures of several of those companies, we're starting to see some potential winners arise in the market. Of course, time will tell which will become the leading names in the industry.

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

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