TDOC Stock: The Growing Telehealth Giant

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Teladoc Stock Riding High on Strong Market Growth

Today’s stock is a very good example of a growth stock. Businesses that make use of the growing digital connectivity and deliver innovative solutions that disrupt a particular industry have the potential to deliver triple-digit gains to investors in the coming years.

One such example is Teladoc Inc (NYSE:TDOC), which is a telehealth company that uses telephone and video conferencing technology to provide on-demand remote medical care with the help of mobile devices, the Internet, phone, and video. It is a convenient and affordable option that allows users to talk to a U.S. board-certified physician.

Teladoc is the country’s first and largest telehealth platform, delivering on-demand healthcare anytime and anywhere. It connects members with over 3,000 physicians and behavioral health professionals who treat a wide range of conditions.

Cases from acute diagnoses such as upper respiratory infections and sinusitis to dermatological conditions, smoking cessation, and anxiety can be handled on the company’s platform.

Teladoc is in a strong position in a growing market. The company completed about 952,000 telehealth visits in 2016. Membership increased by about 43% from December 31, 2015 to December 31, 2016.

The strong growth is fueling a rally in TDOC stock.

More than 17.5 million unique members benefit from access to Teladoc 24 hours a day. Teladoc delivers its service with a median response time of less than 10 minutes from the time a member requests a telehealth visit to the time they speak with a Teladoc physician.

As per a report by Grand View Research, Inc., the U.S. telehealth market is likely to reach $2.8 billion by 2022. The report says that the rising demand for self-care and independent living, along with home care, is quite appealing to the population. Moreover, the rising geriatric population requires around-the-clock monitoring in their homes as they become more prone to a number of chronic ailments. (Source: “U.S. Telehealth Market Size To Reach $2.83 Billion By 2022,” Grand View Research, Inc., last accessed March 9, 2018.)

Teladoc Inc is very well positioned to capitalize on the changes in the healthcare industry, which bodes well for Teladoc stock.

According to the Agency for Healthcare Research and Quality (AHRQ), there are approximately 168 million behavioral health market visits in the U.S. per year. Teladoc estimates that about 131 million (78%) of these visits could be handled through telehealth. (Source: “Annual Report 2016,” Teladoc, Inc., February 24, 2017.)

Further, the National Association of Community Health Centers (NACHC) says that about 62 million people in the U.S. currently have no—or inadequate—access to primary care due to physician shortages. (Source: Ibid.)

Teladoc is preparing itself well to fill these gaps. Last week, the company announced its expanded collaboration with Microsoft Corporation (NASDAQ:MSFT). The companies will work together, with the “Microsoft Azure” cloud service powering Teladoc’s telehealth platform. This will result in a greater number of health systems across the country getting more access to superior telehealth service.

As the demand for Teladoc’s products and services rises, TDOC stock should post bigger gains.

The company announced its fourth-quarter earnings last week, delivering a strong performance. Total revenue for the quarter jumped by more than 100% to touch $77.1 million. The revenue for the whole year was $233.3 million, an increase of 89%. A total of 464,000 telehealth visits for the quarter represented an increase of 49%.

CEO Jason Gorevic said, “Our unique product portfolio and value proposition is being recognized by clients and prospects alike for its breadth and differentiation, as virtual care becomes a core component of the healthcare system of the future.” (Source: “Teladoc Announces Full Year and Fourth Quarter 2017 Results,” Teladoc, Inc., February 27, 2018)

The company’s impressive performance has been pushing Teladoc stock higher. In the last year, TDOC stock has gained over 90%. The following chart shows this phenomenal rise.

teladoc stock chart

Chart courtesy of StockCharts.com

Analyst Take

Teladoc is a leader in virtual care delivery services. It is transforming the access, cost, and quality dynamics of healthcare delivery in the U.S. as the country’s healthcare system experiences a growing crisis in all three of those metrics.

As patients look for reliable, affordable, and high-quality healthcare from the comfort of their homes, the demand for Teladoc services should keep growing, boosting Teladoc stock further. The company has the first-mover advantage in the growing telehealth space and investors should not ignore this opportunity.