Despite the overwhelming number of technological innovations in the last several years, several societal functions remain surprisingly anachronistic. At least when it comes to your doctor’s appointment, Teladoc Health (NYSE:TDOC) seeks to bring this healthcare component to the 21st century. Through a simple but effective app that brings the doctor to your smartphone, the company bridges undeserved patients with professional medical advice, thereby lifting the Teladoc stock price.
Although drug pricing controversies have clouded several segments of the healthcare industry, TDOC stock is one of the bright spots. Since the close of Jul. 2, 2015, shares have gained over 200%. Last year, the company put up impressive results in the markets, returning nearly 74% profits for stakeholders.
Fundamentally, the case for the Teladoc stock price to make a repeat performance appears positive. After all, what makes the underlying healthcare firm stand out is its straightforward solution to offer medical guidance to everyone. Essentially, Teladoc is the Amazon (NASDAQ:AMZN) of medical consultations. Rather than drive to a physical location for the service, both Teladoc and Amazon bring the transaction to your home.
And just like Amazon, Teladoc does away with the inconveniences of traditional doctor-patient interactions. For example, I don’t really care much to arrive 15 minutes early for my appointment, just so I can fill out some paperwork and wait half an hour more. Neither do I want to wait in line to buy the latest gizmo on my wish list.
Amazon radically transformed the retail market. Speculators hope the same for Teladoc, hence the enthusiasm for TDOC stock.
But Teladoc stock represents more than just conveniences: the underlying app can legitimately save lives.
Teladoc Stock Enjoys a Comprehensive Patient Base
Like most negative events, it’s better to nip things in the bud right away. And this is especially true for our health and well being. For instance, every doctor will tell you that frequent checkups are vital to diagnosing and treating cancer at its earlier and more realistically addressable stages.
Furthermore, I don’t think it’s a stretch to assume that most of us recognize this common-sense advice. However, the realities of everyday life often prevent many people from seeking medical advice, perhaps until it’s too late.
According to a study published by the National Institutes of Health, people gave various reasons for skipping or avoiding doctors. One of the more common categories of avoidance involved logistical concerns, such as inconvenient clinic hours or excessive distance.
Frankly but without any judgment, these are silly reasons to not seek medical advice. However, Teladoc’s app eliminates these logistical or administrative barriers, facilitating a pathway for busy patients to receive potentially life-saving guidance. In that context, it’s easy to understand why so many investors love TDOC stock.
Moreover, personal phobias may pose an untenable obstacle for patients to seek necessary care. A common condition called iatrophobia, or the fear of doctors, is a very real problem. I’m sure we can all relate – doctors are life savers, but they can also bear bad news. Understandably, some choose to avoid this anxiety source entirely.
Admittedly, the Teladoc app won’t inherently cure such phobias. But it can at least take the clinical environment out of the picture, which may add to the anxiety. By the way, this is called nosocomephobia. Plus, if you had to get medical advice, your home is the most comfortable place to get it. Thus, the app may convince hesitant patients to receive guidance, which ultimately boosts Teladoc stock.
Not a 100% Clear Bull Case
As with any promising investment, not everything about TDOC stock is inspires confidence. Reading critical assessments of the company, most bears cite the less-than-desirable financials. For example, Teladoc isn’t profitable and its relatively steep net incomes losses may worry conservative buyers.
For me, the biggest risk factor is competition. Remember how I compared Teladoc stock as the Amazon of medical consultations? Well, it turns out that Amazon wants to be the Amazon of such consultations.
Right now, the e-commerce firm turned tech giant isn’t a direct competitor to Teladoc: its Amazon Care initiative, which links people to doctors via an app, is limited to Amazon employees. But that will surely change. The two platforms look awfully similar.
Of course, Amazon has bonkers resources to roll out Amazon Care on a national, and perhaps later a global level. Additionally, the company has big data analytics credibility, which I’m sure they can advantage effectively (and ruthlessly).
On that front, the case for Teladoc stock isn’t as exciting. And the specter of Amazon concerns me. If TDOC shares correct, I may be a cautious buyer. But at this price point, I think the risks outweigh the rewards.
As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.
