The Pain Doctor Will See You Now

In partnership with

Welcome back to GRIT Alpha! This week’s analysis is about one of the NEWEST stocks on the market.

The healthcare industry is shifting back into the spotlight…

Stock Pick: Hinge Health Inc. (HNGE-US, $3.2B MCAP)

And you thought the IPO window was CLOSED?!

We’ve at least got a couple out the door in the midst of all this volatility, and this IPO did very well.

Now - it was repriced to a much more reasonable level from a private round, but that is the harsh dose of reality when you raised money back in 2021. This is a new environment. You cannot have a growth-at-all-costs company with rates this high.

The market is preferring those with a more balanced approach and visible operating leverage in the model. They also need increasing adoption and strong fundamentals.

This company checks all those boxes.

Let’s dig in!

• Why now? 👉 Reasonably Priced IPO Ramping Adoption

• Overview 👉 What Does Hinge Health Do?

• Product Suite 👉 Hardware, Software, Support

• Drivers 👉 Growth Vectors & Competitive Advantage

• How Do They Make Money? 👉 Selling into Employers (and health plans)

• By The Numbers 👉 Key Metrics

• Risks 👉 Potential Pitfalls

Learn AI in 5 minutes a day

This is the easiest way for a busy person wanting to learn AI in as little time as possible:

1. Sign up for The Rundown AI newsletter

2. They send you 5-minute email updates on the latest AI news and how to use it

3. You learn how to become 2x more productive by leveraging AI

Sign up to start learning.

Why now? 👉 Reasonably Priced IPO Ramping Adoption

Hinge Health is grabbing headlines as one of 2025’s most intriguing new IPOs. The company debuted on the NYSE under ticker HNGE in May 2025 at $32 per share – and promptly popped about 17% on its first trading day, closing around $37.56. This strong debut effectively ended a dry spell for digital health IPOs and reflects investor excitement around Hinge’s improving fundamentals and unique positioning.

So why consider Hinge Health now? First, the timing: after a frothy 2021 valuation of $6.2 billion, Hinge went public at a much more reasonable ~$2.9 billion market cap – a ~60% cut from its peak. In other words, public investors get to buy in at a valuation roughly half of what late-stage VCs paid.

Market traction adds to the “why now.” Hinge Health’s digital musculoskeletal (MSK) care platform is gaining significant adoption among employers and health plans. The company serves over 2,250 enterprise clients (including nearly half of the Fortune 100) and had 532,000 members enrolled by end of 2024. These users represent only a fraction of the 20 million covered lives under contract, leaving ample room for expansion.

With an AI-powered approach to treating back and joint pain at scale, Hinge is positioned at the intersection of two hot trends – digital health and artificial intelligence. Investors are increasingly bullish on companies that leverage AI to improve efficiency, and Hinge’s platform automates much of physical therapy through AI-driven motion tracking and personalized care. In short, Hinge Health’s recent IPO offers a chance to invest in a fast-growing, tech-enabled healthcare company right as it demonstrates improving financial health and capitalizes on huge unmet needs in the MSK market.

Overview 👉 What Does Hinge Health Do?

Hinge Health tackles musculoskeletal (MSK) issues—chronic back, knee, and shoulder pain—through virtual physical therapy that replaces clinic visits. Its platform combines software, wearable sensors, and smartphone-camera computer vision: patients perform prescribed exercises at home while AI analyzes motion, delivers real-time feedback, and personalizes routines. A remote clinical team of physical therapists, physicians, and health coaches reviews data, adjusts plans, and keeps users engaged via text or video—scaling expert care to thousands.

The program covers the full MSK spectrum: acute injuries, post-surgery rehab, chronic arthritis, and preventive wellness. For employees whose company or insurer partners with Hinge, it’s free at the point of use, eliminating cost and scheduling hurdles that often derail traditional PT. Higher adherence yields better results: internal studies show virtual therapy matches or outperforms in-clinic care with superior patient satisfaction.

By delivering AI-guided treatment in the living room, Hinge aims to cut pain, curb surgeries and opioid use, and reduce costs in the $70 billion physical-therapy market.

Product Suite 👉 Hardware, Software, Support

Hinge Health pairs hardware, software, and human support to create an all-in-one “digital clinic” for musculoskeletal care:

• Enso Pain-Relief Patch – A small, wireless, FDA-cleared device that delivers electrical nerve stimulation (advanced TENS) to painful areas, easing discomfort in minutes so users can keep exercising.

• App-Based Exercise Therapy – Personalized, AI-driven workout plans and education that adapt as patients progress through multi-week regimens for back, joint, or muscle issues.

• Motion Tracking – Wearable sensors or a phone camera monitor form, count reps, and feed data back to the platform, allowing objective progress tracking and automatic plan adjustments.

• Remote Care Team – Board-certified health coaches and licensed physical therapists chat or video-consult with users, customize programs, and maintain motivation.

• Preventive & Wellness Modules – Lighter routines and lifestyle tips, plus a camera-only version launched in 2024 for lower-cost, global deployment.

This 360° mix of AI guidance, real-time data, pain management, and expert oversight distinguishes Hinge Health in the $70 billion PT market.

Drivers 👉 Growth Vectors & Competitive Advantage

Key drivers of growth are as follows:

Huge, Rising MSK Spend: Half of adults battle back, joint, or muscle pain each year, and aging populations keep swelling the bill. Employers rank MSK among their costliest issues, giving Hinge a vast, ready-made user pool.

Mainstream Digital Care: Telehealth comfort post-2020 means employees welcome app-based therapy. Studies show virtual PT matches—or beats—in-clinic outcomes with higher adherence, so benefits teams now seek digital MSK solutions rather than doubt them.

AI-Powered Scale & Margins: Computer-vision motion tracking lets one coach supervise many patients, cutting ~95 % of traditional clinician time. Algorithms personalize plans, flag drop-outs, and boost retention—driving better results while widening Hinge’s cost and price edge.

Insurer & Employer Flywheel: Partnerships with all five national carriers embed Hinge in existing health-plan workflows. A single insurer deal can activate dozens of Fortune-500 clients at minimal CAC. Net dollar retention sits at 117%, showing customers expand coverage once they see ROI.

Proven Outcomes, Value-Based Pricing: Demonstrated pain reduction, surgery avoidance, and a reported 2.7:1 ROI convince buyers and support performance-tied contracts. In a value-based world, Hinge’s willingness to guarantee results differentiates it from many digital-health peers.

Product & Geographic Optionality: New lighter-touch, camera-only offerings and early moves into adjacent conditions or overseas markets could multiply the addressable opportunity beyond today’s $70 B PT space.

A massive unmet need, receptive market, defensible AI edge, powerful distribution, strong clinical proof, and expansion levers underpin Hinge Health’s growth trajectory. Now - for competitive advantage…

Hinge’s advantage largely comes down to scale, outcomes, and comprehensiveness. It is currently the largest pure-play MSK digital health provider by revenue, which gives it resources to invest in R&D (like the Enso device, AI features) and a bigger dataset to hone its algorithms.

Hinge also differentiates with its full-stack approach: combining hardware, coaching, and AI. Some competitors might do purely software (lower cost but maybe less effective for certain patients) or purely coaching (less scalable). Hinge’s blend arguably yields better engagement and outcomes, which they can show to prospective clients. This is evidenced by Hinge’s high client retention and multiple Fortune 100 logos – a pedigree that new entrants will need time to build.

How Do They Make Money? 👉 Selling into Employers (and health plans)

Hinge Health runs a B2B2C model, selling its digital musculoskeletal (MSK) program to employers and health plans, which then offer it as a covered benefit. Contracts target large self-insured companies, public-sector employers, unions, and—crucially—national insurers that bundle Hinge into their plans.

Per-member, outcome-based pricing underpins revenue: clients pay only for employees who enroll and engage, and a slice of Hinge’s fees is “at risk” if targets such as pain-score improvement, surgery reduction, or engagement aren’t met. This aligns incentives—Hinge must drive results to earn full payment—while giving employers comfort that they’re paying for value, not just eligibility.

Most agreements span about three years and increasingly flow through the five major U.S. carriers (UnitedHealthcare, Anthem/Elevance, Aetna, Cigna, Humana). An employer already on Aetna, for example, can activate Hinge with no extra contracting, embedding costs directly in medical coverage and simplifying claims-based billing.

Under these deals, Hinge typically charges a per-member-per-month or annual fee; though undisclosed, industry peers suggest a range of several hundred to a few thousand dollars per participant each year, depending on service depth. Outcomes guarantees can trigger fee reductions if targets slip, but strong clinical data let Hinge take that risk confidently.

The value proposition is straightforward: by cutting surgeries, MRIs, opioid use, and other costly interventions, Hinge saves employers and insurers more than its subscription costs, generating clear ROI. In turn, the company enjoys SaaS-like recurring revenue and high gross margins as long as members keep using—and benefiting from—the service.

By The Numbers 👉 Key Metrics

The fundamentals are on an upswing. Hinge Health achieved its first profitable quarter in Q1 2025, earning $17 million net income on $124 million revenue. Revenue jumped 50% year-over-year in that quarter, signaling reaccelerating growth. For the full year 2024, Hinge grew revenue 33% to $390 million and nearly broke even (only a $12 million net loss, a huge improvement from a $108 million loss in 2023). Gross margins have reached ~80%, and the company even generated positive free cash flow in 2024 – rare feats in digital health. This combination of growth and operating leverage makes Hinge stand out in an industry where many peers are still deeply unprofitable.

It’s worth noting that this 532k is the number of individuals actively enrolled in Hinge’s programs; the total eligible population (“covered lives”) is around 20 million, so penetration is only about 2.7% of those with access. This leaves significant room for growth by simply driving more eligible people to use the benefit.

Another encouraging metric is Hinge’s 117% net dollar retention, meaning existing employer customers increased their spend ~17% (through higher uptake or adding services) over the last year. In other words, not only is Hinge signing new clients, but its current clients are sticking around and expanding – a hallmark of a successful SaaS-like model.

Risks 👉 Potential Pitfalls

Dependence on Engagement & Outcomes: Hinge gets paid only when employees actively use the program and hit outcome targets, so low engagement directly hurts revenue. One underperforming client cohort could trigger contract clawbacks and dent its reputation.

Contract Concentration & Churn: Large health-plan partners funnel many clients, but losing a major carrier would slash enrollment pipelines overnight. Limited renewal history means employers could drop Hinge once savings plateau or budgets tighten.

Scaling Profitably: After hitting profitability, Hinge must keep sales and care-team costs in check while pursuing new markets. Rapid growth could strain operations or require renewed marketing spend, pressuring margins.

Regulatory & Data-Privacy Risk: Shifts in telehealth rules, reimbursement, or data-security laws could impose new costs or limits on Hinge’s model. Any breach of sensitive patient data would invite legal action and damage trust.

Macro-Economic Cyclicality: Employer belt-tightening in a downturn can delay benefit rollouts and shrink eligible member pools. Although Hinge argues its cost-saving pitch is recession-resilient, prolonged weakness could still slow bookings.

Wrapping Up…

Hinge is a play on digital transformation in a sector that badly needs it.

The stock could be rewarding if Hinge becomes the dominant platform for musculoskeletal care (and beyond), turning into a sort of “Teladoc of physical therapy” or an indispensable benefit for most employers. However, it’s still an early-stage public company, so volatility is likely. As a recent IPO, the share price may swing with news and quarterly performance.

If you believe in the macro trend of AI-driven, preventative healthcare – and you’re willing to ride out some bumps – Hinge could be a worthy addition as a growth stock in your portfolio.

For those looking for the best Week in Review and Investing Week Ahead posts online — subscribe to the Grit Flagship newsletter below! 📩

Cheers,

The GRIT Alpha Team

Grit is a publisher of financial information, not an investment advisor. Grit does not provide personalized or individualized investment advice or information that is tailored to the needs of any particular recipient. Grit does not guarantee the accuracy or completeness of the information provided in this page. All statements and expressions herein are the sole opinion of the author or paid advertiser.

THE INFORMATION CONTAINED ON THIS WEBSITE IS NOT AND SHOULD NOT BE CONSTRUED AS INVESTMENT ADVICE, AND DOES NOT PURPORT TO BE AND DOES NOT EXPRESS ANY OPINION AS TO THE PRICE AT WHICH THE SECURITIES OF ANY COMPANY MAY TRADE AT ANY TIME. THE INFORMATION AND OPINIONS PROVIDED HEREIN SHOULD NOT BE TAKEN AS SPECIFIC ADVICE ON THE MERITS OF ANY INVESTMENT DECISION. INVESTORS SHOULD MAKE THEIR OWN INVESTIGATION AND DECISIONS REGARDING THE PROSPECTS OF ANY COMPANY DISCUSSED HEREIN BASED ON SUCH INVESTORS’ OWN REVIEW OF PUBLICLY AVAILABLE INFORMATION AND SHOULD NOT RELY ON THE INFORMATION CONTAINED HEREIN. INVESTORS SHOULD OBTAIN INDIVIDUAL INVESTMENT ADVICE BASED ON THEIR OWN CIRCUMSTANCES BEFORE MAKING AN INVESTMENT DECISION

No statement or expression of opinion, or any other matter herein, directly or indirectly, is an offer or the solicitation of an offer to buy or sell the securities or financial instruments mentioned.

The author, publisher or insiders of the publisher may currently have long or short positions in the securities of the companies mentioned herein, or may have such a position in the future (and therefore may profit from fluctuations in the trading price of the securities). To the extent such persons do have such positions, there is no guarantee that such persons will maintain such positions. Neither the author of this post nor the funds they manage hold any positions in the securities mentioned.

Any projections, market outlooks or estimates herein are forward looking statements and are inherently unreliable. They are based upon certain assumptions and should not be construed to be indicative of the actual events that will occur. Other events that were not taken into account may occur and may significantly affect the returns or performance of the securities discussed herein. The information provided herein is based on matters as they exist as of the date of preparation and not as of any future date, and Grit undertakes no obligation to correct, update or revise the information in this document or to otherwise provide any additional material.

Grit does not accept any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of the information contained herein.

By using the Site or any related social media account, you are indicating your consent and agreement to this disclaimer and our terms of use. Unauthorized reproduction of this newsletter or its contents by photocopy, facsimile or any other means is illegal and punishable by law.

Grit publishes content through Beehiiv, an email newsletter platform and operates the website Gritcap.io and social media accounts (including but not limited to): Instagram, Twitter, Linkedin, TikTok, YouTube, SnapChat, Facebook and Threads. By accessing Grit’s content, you agree to be bound by the Terms of Use and Privacy Policy, in effect at the time you access this website or any page thereof or any of Grit’s content. The Terms of Use and Privacy Policy may be amended from time to time. Nothing on this website or Grit constitute an offer to sell, or a solicitation of an offer to buy or subscribe for, any securities to any person in any jurisdiction where such an offer or solicitation is against the law or to anyone to whom it is unlawful to make such offer or solicitation. Grit is not an underwriter, broker-dealer, Title III crowdfunding portal or a valuation service and does not engage in any activities requiring any such registration. Grit does not provide advice on investments or structure transactions. Offerings made under Regulation A under the U.S. Securities Act of 1933, as amended (the "Securities Act") are available to U.S. investors ONLY who are “accredited investors” as defined by Rule 501 of Regulation D under the Securities Act well as non-accredited investors, who are subject to certain investment limitations as set forth in Regulation A under the Securities Act. In order to invest in Regulation A offerings, investors may be asked to fill out a certification and provide necessary documentation as proof of your income and/or net worth to verify that you are qualified to invest in offerings posted on this website. All securities listed on this site are being offered by, and all information included on this site is the responsibility of, the applicable issuer of such securities. Grit does not verify the adequacy, accuracy or completeness of any information. Neither Grit nor any of its officers, directors, agents and employees makes any warranty, express or implied, of any kind whatsoever related to the adequacy, accuracy, valuations of securities or completeness of any information on this site or the use of information on this site. Neither Grit nor any of its directors, officers, employees, representatives, affiliates or agents shall have any liability whatsoever arising from any error or incompleteness of fact, or lack of care in the preparation of, any of the materials posted on this website. Investing in securities, especially those issued by start-up companies, involves substantial risk. investors should be able to bear the loss of their entire investment and should make their own determination of whether or not to make any investment based on their own independent evaluation and analysis.

Please read: Terms of Use, Privacy Policy, Disclosure Policy, State Disclosure Policy, and Disclaimer Policy

If you have any questions please contact us at [email protected]