Teladoc Health, Inc, (NYSE: TDOC)
Teladoc Health, Inc. is a multinational telemedicine and virtual healthcare company that provides telehealth, medical opinions, AI and analytics, telehealth devices and licensable platform services. The company has its headquarters in New York State, USA and was founded in 2002. Despite the fact that things are slowly returning to normal post the pandemic, Teladoc has seen a significant increase in demand for telehealth services and remains competitive today. Having seen an increase in hype by 94% over the last day, investors were prompted to wonder what makes the stock gain so much popularity. Currently, shares of Teladoc Health trade at $27.40.
Positive Hype
There are numerous reasons that Teladoc has come to gain this much positive hype, here are some of them.
Its 2020 revenue leapt upward by nearly 100% from the prior year, while 2021 saw it report a nearly 90% spike in annual revenue, which didn’t fall as far as expected even after things came back to normal.
Teladoc's total visits jumped by 14% year over year to 4.6 million during the quarter, while its U.S. paid memberships climbed to 57.8 million, 10% higher than the prior-year quarter.
This year, Teladoc projects its revenue will come in at around $2.4 billion. That's impressive for a company that in 2019 reported just $553 million in sales.
Average revenue per U.S. paid member jumped by 9% year over year to $2.60.
In the first nine months of 2022, Teladoc's revenue jumped 20% from the year-ago period. In the most recent quarter, the company reported a 17% year-over-year revenue increase, a solid clip for a company at this stage in its business growth.
Management noted in the earnings call that the biggest boost to that growth was BetterHelp, its direct-to-consumer mental health brand, which saw sales rise over 35% as compared to the prior year's quarter.
And while the company was still unprofitable, it reduced its net loss by a notable 13% from the prior-year period while ending the quarter with a cash position just shy of $900 million.
Meanwhile, management is still guiding for annual revenue growth of more than 20% in 2022.
The global telehealth industry was already valued at $42 billion as of 2019. By 2027, this space may witness growth to an eye-popping valuation of nearly $400 billion.
Negative Hype
No investment is free from negatives, and Teladoc isn’t an exception. It is important to consider the downsides of an investment before making it, here are a few of them.
One is a general distaste for so-called stay-at-home stocks, which some investors have turned away from as the world returns to a sense of normalcy.
In addition, the current macro environment has made many investors wary of growth-oriented businesses like Teladoc.
And finally, there's been the company's lack of profitability, worsened by the nearly $10 billion in impairment charges it reported in the first half of this year, stemming from its acquisition of Livongo in 2020.
Conclusion
Although there's room for more than one winner in this space, Teladoc remains the leading presence in the global telehealth industry. The company benefits from a first-mover advantage and has already enrolled millions of customers in its plans. It continues to monetize these customers by signing them on to more services, which is why its average U.S. revenue per member keeps increasing. While there are likely still bumps in the road ahead for Teladoc investors, its business looks on track for durable growth that investors can benefit from over the long haul.
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