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Teladoc Gains on Growing Acceptance for TeleHealth Services

Zacks Equity Research

Teladoc Health, Inc. TDOC is poised for strong growth in the coming years due to the growing acceptance of telehealth services around the globe.


Teladoc, by virtue of its expansive virtual care delivery solution, is fast gaining ground in the rapidly growing telehealth industry in the United States and internationally. The telehealth industry has ample scope to flourish owing to concerning health care cost following inefficient care, duplication of services, significant waste and extreme variation in access, cost and quality of care.

As per a detailed analysis by Market Research Future (MRFR), the global telemedicine market is anticipated to garner $56.8 billion, demonstrating a CAGR of 16.8% during the forecast period (2017-2023). The extensive adoption of the electronic health record and electronic medical record is favoring the telehealth market’s growth across the globe.

Teladoc has the capability to address this inefficiency by providing superior quality of care through platform that caters to consumer demand and physician availability in real-time and in various modalities such as video, web, mobile and telephone. Moreover, the emergence of technology via big data and analytics, cloud-based solutions, online video and mobile applications offers the company with huge opportunity for growth.

Telehealth has also been included in Medicare Advantage plans, which will increase demand for these services in the United States.

Teladoc’s strategy to complement its organic growth with inorganic means is commendable. The acquisitions of HealthiestYou, Best Doctors, Advance Medical have increased the breadth of its business. The latest acquisition of Advance Medical has given it a global exposure, which should enable it to harness the international markets.

Teladoc is one of the few companies, which enjoys first-mover advantage and should gain from the global demand for telehealth given its acquisition of Advance Medical. This buyout has expanded Teledoc’s business in Latin America and Asia. Advance Medical allows Teladoc to deliver care in 125 countries in more than 120 languages.

The Infrastructural support from the recent acquisitions of Advance Medical and Best Doctors enabled the company to form a virtual care service called Teladoc Global Care, which became operational this year. This new platform should provide geographical diversification to the company.

We expect the company’s Global Care platform to attract huge traction as employers and insurers demand international services for telehealth, due to the growing number of expatriates.

Teladoc, carrying a Zacks Rank #3 (Hold), has gained 13% year to date, compared with the industry’s decline of 11.7%. The company’s strong growth is likely to sustain its shares' rally, going forward.

Some better-ranked stocks in the same space are Avedro, Inc. AVDR, Intrexon Corporation XON and Medpace Holdings, Inc. MEDP. Each of these stock carries a Zacks Rank #2 (Buy).  Avedro, Intrexon and Medpace beat estimates in the last reported quarter by 17.31%, 19.23% and 28.57%, respectively.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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