Teledoc: A Trend That's Here to Stay

04/09/2020 5:00 am EST

Focus: TECHNOLOGY

Glenn Rogers

Contributing Editor, Internet Wealth Builder and The Income Investor

My number one pick for now, Teladoc Health Inc. (TDOC), is the global leader in virtual health care and is the only pure play on telemedicine, explains Glenn Rogers, a leading growth expert and contributing editor to Internet Wealth Builder.

Its technology and staff allow people around the world to have access to qualified medical consultations without leaving home. It uses tele-health, expert medical services, artificial intelligence, and analytics to provide consultation and care.

Teledoc has more than 2,400 employees. The organization delivers care in more than 175 countries and in more than 40 languages, partnering with employers, hospitals, and health systems, and insurers. The company is based in Purchase, New York.

The stock was trading in the $50 range almost up to the time the coronavirus pandemic hit. The shares have since shot up dramatically.

At this point in time, past financial results mean little as the world has changed so dramatically. But it’s significant that even before the outbreak, 2019 year-over-year revenue grew 32% to $553.3 million and total visits increased by 57% to 4.1 million.

“Our diversified growth strategies are driving strong growth across our channels,” said CEO Jason Gorevic. “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.”

At this point, Teledoc does not make a profit, with a net loss of just under $100 million ($1.38 per share) in 2019. In a forecast prepared prior to the pandemic, the company forecast revenue of $695-710 million in 2020 and a loss per share of between $1.06 and $1.19. But those numbers will probably be revised as the year unfolds.

This is a trend that is likely to continue even after the virus is brought under control. The stock is up 31% since March 17, and, even though the price appears to be getting ahead of itself, I think it’s still a buy for aggressive investors.

Our recommendation is to take a half position now; if the price pulls back, add more. Remember, this is a highly volatile market. As promising as this company looks, don’t take risks if you can’t afford a loss.

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