Teladoc (TDOC) Scales 52 Week High on InTouch Health Purchase
On Jul 2, shares of Teladoc Health, Inc. TDOC hit a 52-week high of $210.86. This stock price rise was attributable to the acquisition news of InTouch Health, a provider of telehealth solutions. The deal will expand the total addressable market (TAM) for Teladoc and open up another avenue of growth.
InTouch Health brings with it a network of more than 450 hospitals, above 14,500 physicians and in excess of 40 clinical use cases to the combined entity. The buyout will widen Telehealth’s reach in the telehealth market, which has grown exponentially in recent months since the outbreak of COVID-19.
Teladoc gains the first mover advantage in the teleheath industry and has a vast scale and platform unmatched by any other player in the same industry. The transaction will add capabilities to its already diverse range of healthcare solutions that include acute visits, chronic conditions management, complex specialty care and remote surgery.
The takeover happens at the opportune time when demand for telehealth services is gathering momentum amid social distancing. Demand for telehealth consultancy will continue to stay strong even in post COVID-19 world as people are getting used to the convenience, flexibility, effectiveness and affordability of virtual health services.
The consolidation under discussion also reflects the telehealth company’s efforts to thrive rapidly in the market, which may see deeper penetration in times to come. Per Arizton research reports, the U.S. telehealth market is projected to witness a CAGR of 30% during the 2019-2025 period. Further, according to a Global Market Insights Inc. article, the U.S. telemedicine market value is forecast to cross $64 billion by 2025.
Year to date, the stock has soared 149.5% against its industry’s decline of 3.1%.
The visible surge in patient visits and revenue generation on the back of virtual doctor consultation raise investors’ optimism.
Other companies in the healthcare space that too developed virtual care solution and services are UnitedHealth Group Inc. UNH, Cigna Corp. CI, Humana Inc. HUM et al.
Teladoc currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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