Virtual healthcare services provider Teladoc Health (NYSE:TDOC) earned a place in the limelight this year as the novel coronavirus spread across the world. As a result, the TDOC stock value increased dramatically in 2020.
Yet, whenever there’s a new superstar in the stock market, there are bound to be some skeptics and doubters. Lately, some folks have observed TDOC stock pulling back from its all-time highs and they’re hesitant to jump into the trade.
Or maybe they’re concerned that the discovery and distribution of a Covid-19 vaccine would diminish the demand for telemedicine. Based on that line of reasoning, some traders might choose to sell TDOC stock or just avoid it altogether.
As often happens in the markets, the fears about TDOC stock tend to be overstated or just misguided. Teladoc is helping to redefine the delivery of healthcare services, and patient TDOC investors will be rewarded in due time.
TDOC Stock at a Glance
Interestingly, there was another bull run in TDOC stock prior to 2020, but it largely went under the radar. Thus, from May 2016 to September 2018, TDOC had a massive price move from $10 to $86.
Then the stock pulled back for a little while, but that’s a normal part of the process after a huge bull move. As the old saying goes, stocks don’t just go straight up. Retracements along the way ought to be expected.
We’ve already seen this happen earlier this year. In late April, TDOC stock pushed up to nearly $200 before pulling back. This turned out to be a dip-buying opportunity as TDOC hit its 52-week high of $253 in early August.
On the morning of Nov. 25, TDOC stock is trading in the $188 area. So, we have another chance to accumulate shares at a reduced price point. We’ve witnessed TDOC recovering from previous pullbacks. If history is a reliable guide, then the stock could reach fresh highs in a matter of months, if not weeks.
For many people, the prospect of a widely available Covid-19 vaccine is exciting. On the other hand, TDOC stock holders might express concerns about a broadly accessible vaccine.
This topic has come into focus recently as a number of drugmakers have made claims of having Covid-19 vaccine candidates with efficacy rates exceeding 90%. There has even been talk of the efficacy rates approaching 95%.
The concern is that an effective vaccine might lessen the demand for telehealth services. However, it’s clear that a new page has turned in healthcare delivery and there’s no going back at this point.
As evidence of this, we can observe that during the third quarter, Teladoc’s provider network delivered more than 2.8 million virtual visits. That’s triple the number of virtual visits delivered during last year’s third quarter.
In other words, the adoption rate of Teladoc’s services has been not only strong, but consistently sustained even during a time when multiple drugmakers were developing vaccines for Covid-19.
Quelling the Concerns
There’s no need to let “vaccine fears” dissuade you from considering a position in TDOC stock. It’s unfortunate, but Covid-19 cases are still on the rise in a number of regions, including in the U.S.
Dr. Henry Walke, the Covid-19 incident manager for the Centers for Disease Control (CDC), recently reported that the CDC is “alarmed” by the “exponential increase in cases and hospitalizations and deaths” caused by Covid-19.
Moreover, data published by the Department of Health and Human Services indicates that around 20% of U.S. hospitals faced or expected to face a shortage in staffing. The health-care system is overwhelmed, and the coronavirus crisis is far from resolved at this point.
The idea here isn’t to frighten you, but only to assuage the concerns about TDOC stock falling because drugmakers are developing vaccines. The need for remotely delivered health care won’t go away, and the TDOC share price could be poised for a swift recovery.
Analysts at investment bank Baird seem to envision strong upside potential for TDOC. In fact, they’ve assigned a $220 price target for the stock. This is reasonable, and TDOC stock dip buyers may be rewarded sooner rather than later.
Don’t get the wrong idea. We’re all rooting for drugmakers to bring a safe and effective Covid-19 vaccine to the public.
This will happen sooner or later, and it shouldn’t worry TDOC stock holders. History has shown that Teledoc tends to recover from dips. And even as drugmakers develop vaccines, the shift to telemedicine has been strong.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation.