InnerScope Hearing ($INND): The Future of Hearing Aids
Fellow Sapiens, I am pleased to introduce you to InnerScope Hearing Technologies. Before embarking on this journey, I have to lay waste to short term investors. If you get off on get rich quick schemes, then this stock is not for you, and you should close this article. Now that we have separated the wheat from the chaff, let’s begin.
InnerScope is disrupting the hearing aid market with its direct-to-consumer business model. Its value proposition stems from offering its self-fitting and self-adjusting hearing aids at a much lower total price point by removing the need to see a hearing professional.
The completion of InnerScope’s FDA medical device registration for its newest hearing aid devices has paved the way for launching its hearIQ app. It is estimated that the app-controlled self-adjusting hearing aids costs up to 85% less than traditional hearing aids fit at a clinic.
The company is banking on the new Hearing Aid Over-The-Counter Law which will allow OTC hearing aids to be sold in stores without the need to see an audiologist. Nowadays, a staggering 98% of all hearing aids are sold and fit by healthcare professionals and the cost per earpiece can go to more than 4,000 dollars.
Now, many of you might not be aware of this, but the market for hearing aid consists of more than 60 million people in North America and more than 1.5 billion people worldwide. This is definitely a big market, expected to grow at 8% annually from 2019 to reach 13 billion dollars by 2027. There is also an opportunity to address an underserved market. It is sad to note that the high costs associated with the traditional sales and delivery process has left an estimated 40 million Americans with untreated hearing loss. But a direct-to-consumer model allows to bridge that gap and cater for the people.
Now, let’s talk numbers. InnerScope has a current market cap of around 170 million dollars. But, it would not be fair to compare InnerScope to well established companies in the likes of Sonova and Starkey. We can however take Eargo as a proxy. The company develops and sells hearing aids through online stores and went public in October 2020.
Eargo has grown revenues from 6.6 million dollars in 2017 to now close to 70 million dollars, giving it a market cap of around 2 billion dollars. Now, by no way am I suggesting that InnerScope is worth that much at this point in time. What I am implying is that we can model InnerScope’s growth based on comparables. What is more, the hearing industry has been undergoing consolidation over the years, with the bigger players buying up smaller ones as they search for growth. All that is left to say is that InnerScope’s future does look promising.
Now, with all that in mind, I would like to remind you that this is my personal opinion. It should not be construed as financial advice. Please conduct your own due diligence before undertaking any investments. With that said, do you believe in InnerScope’s value proposition? Will you be buying their shares? And if not, why?
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