Teladoc Health Inc Thrives During Coronavirus Sell-Off, Up 70% in 2020

Teladoc Health Inc: Virtual Health Provider At Record High, Up 70% YTDTeladoc Health Inc Continues to Trade at Record Levels

Tech stocks, along with the broader market, have been getting crushed due to the ongoing coronavirus fears. Furthermore, the uncertainty around the oil dispute between Russia and Saudi Arabia is wreaking havoc on the markets, which show no real signs of returning to normal anytime soon.

One tech stock that has plowed through the uncertainty and racked up strong gains (about 70% year-to-date and about 130% year-over-year) is virtual healthcare provider Teladoc Health Inc (NYSE:TDOC).

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TDOC Stock Overview

Amidst the coronavirus outbreak, more and more U.S. health officials are pushing for the greater use of telehealth services.

So much so that the federal $8.3-billion emergency coronavirus spending package temporarily waives coverage restrictions on telemedicine for Medicare patients. (Source: “President Trump Signs $8.3B Coronavirus Funding Bill, Telehealth Restrictions Waived,” HealthLeaders, March 6, 2020.)

Telehealth is perfectly suited to provide healthcare that is safe, effective, and efficient. Not just during public health emergencies, but also in day-to-day care.

That’s nothing new to Teladoc, a leading provider of high-quality, low-cost, virtual healthcare services. Its award-winning online platform allows patients and healthcare providers to have integrated smart user experiences through desktop computers or mobile devices. (Source: “Investor Day,” Teladoc Health Inc, March 5, 2020.)

The service covers various conditions, including non-critical, chronic, and complicated cases.

The Purchase, New York-based company partners with employers, hospitals, health systems, and insurers to provide care in more than 175 countries and in more than 40 languages. (Source: “Teladoc Health Reports Fourth-Quarter and Full-year 2019 Results,” Teladoc Health Inc, February 26, 2020.)

Teladoc Stock Information
Market Cap $9.8 Billion
52-Week Change 148.7%
52-Week High $153.59
52-Week Low $48.57
Shares Outstanding 72.8 Million
Float 72.2 Million
50-Day Moving Average $113.91
200-Day Moving Average $84.92

(Source: “Teladoc Health, Inc. (TDOC),” Yahoo! Finance, last accessed March 11, 2020.)

Strong Q4 and Full-Year Results

On February 26, Teladoc announced that its revenue for the fourth quarter ended December 31, 2019 increased 27% year-over-year to $156.5 million. (Source: Teladoc Health Inc, February 26, 2020, op. cit.)

Net loss for the quarter came in at $19.0 million ($0.26 per share), an improvement from the fourth-quarter 2018 net loss of $24.9 million ($0.35 per share). Adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) were $15.2 million, a 162% year-over-year increase.

“We demonstrated outstanding performance in the fourth quarter and full year of 2019 as we reported record results that were at the high end or exceeded our expectations on all key metrics. Our diversified growth strategies are driving strong growth across our channels,” said CEO Jason Gorevic.

Full-year revenue advanced 32% year-over-year to $553.3 million. Teladoc reported a full-year net loss of $98.9 million ($1.38 per share), versus a 2018 net  loss of $97.1 million ($1.47 per share).

Full-year adjusted EBITDA was $31.8 million, a 137% increase from the 2018 adjusted EBITDA.

During 2019, U.S. paid memberships increased 61% to 36.7 million, which helped lift the company’s full-year subscription revenue 29% year-over-year to $356.6 million.

Gorevic added, “Looking forward, we are well positioned with significant momentum to extend our leadership position and to meet the increasing demand for our comprehensive service offering.”

Financial Outlook

For the first quarter of fiscal 2020, Teladoc Health Inc expects:

  • Total revenue in the range of $169.0 to $172.0 million.
  • EBITDA loss in the range of $7.0 to $9.0 million.
  • Adjusted EBITDA in the range of $9.0 to $11 million.
  • Net loss per share in the range of $0.34 to $0.37.

For fiscal 2020, Teladoc expects:

  • Total revenue in the range of $695.0 to $710.0 million.
  • EBITDA loss in the range of $5.0 to $15.0 million.
  • Adjusted EBITDA to be in the range of $60.0 to $70.0 million.
  • Net loss per share in the range of $1.06 to $1.19.

Analyst Take

Teladoc Health Inc was already a great virtual healthcare provider before the coronavirus wreaked havoc on the global markets. The company reported strong fourth-quarter and full-year results, with strong growth in paid memberships.

The rise of public health emergencies like the coronavirus further highlights how important medical tech companies like Teladoc are. This bodes well for TDOC stock throughout 2020.