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Teladoc (TDOC) Up 49% Year to Date: Will the Rally Continue?

Zacks Equity Research

Teladoc Health, Inc. TDOC is in investors’ good books owing to its fast growing telehealth services business.

Teladoc Health is the leading global virtual healthcare provider with strong competitive advantages that address the most pressing challenges and trends in the delivery of healthcare around the world. The company’s innovation and long-standing operational excellence provide it with significant first-mover advantages.

Year to date, the stock has gained 48.7%, against its industry’s decline of 3%. Its revenues have been increasing over the years driven by growth in membership and patient visits.

Increase in patient visits also reflects the fast growing adoption of telehealth services. In 2019, the company generated positive cash flows from operations for the first time since its inception. Also, its net loss narrowed over the years.   

The company is also expanding its roster of clients, which reflects its competitive and comprehensive virtual offerings.

Teladoc is the only telehealth provider that has international presence. The company expanded its international presence through the acquisition of Advance Medical in 2018, which was built on its acquisition of Best Doctors in 2017. In 2019, the company launched its telehealth offering in Canada.

Recent regulatory changes, which now allow telehealth benefits to be part of Medicare Advantage (MA) plans is a positive for Teladoc. This should open up new opportunities for the company. Effective 2020, telemedicine services are eligible for reimbursement under MA. This is believed to increase the company’s market share as nearly 20 million of individuals, currently insured under MA, moves to telehealth services.

Teladoc is on track to deliver an integrated virtual care experience across platforms supporting acute complex and chronic care needs and addressing the mental health and physical health challenges in 2020. In this vein, the company made an investment in Vida Health. Teladoc Health will be the exclusive virtual care partner of Vida Health, collaborating to deliver chronic care solutions with increasing digital and clinical integration.

Recently, the company announced that it will acquire InTough Health via which it will be able to provide healthcare solutions ranging from critical to chronic to everyday care. The deal will expand the total addressable market (TAM) for Teladoc and open up another avenue for growth.

The company’s strong guidance, which points to revenue, membership, visit and EBITDA growth, gives investors a sense of optimism about it.  

Teladoc carries a Zacks Rank #3 (Hold). Some better-ranked players in the same space are AMN Healthcare Services Inc. AMN, Medpace Holdings, Inc. MEDP and HealthEquity, Inc. HQY. Each of these stocks carries a Zacks Rank #2 (Buy).

AMN Healthcare, Medpace Holdings and HealthEquity surpassed their estimates in the last reported quarter by 14.86%, 13.33% and 113.64%, respectively.

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

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AMN Healthcare Services Inc (AMN) : Free Stock Analysis Report
 
HealthEquity, Inc. (HQY) : Free Stock Analysis Report
 
Teladoc Health, Inc. (TDOC) : Free Stock Analysis Report
 
Medpace Holdings, Inc. (MEDP) : Free Stock Analysis Report
 
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