Well before the novel coronavirus brought social distancing and the new normal to our cultural lexicon, Teladoc Health (NYSE:TDOC) was well on its way to sparking a rethink in healthcare. As Amazon (NASDAQ:AMZN) did with commerce, the beauty of TDOC stock stems from the underlying company’s leveraging of connectivity innovations toward compelling solutions for our high-pace world.
Before the pandemic, many major urban center dwellers found it incredibly difficult to take time out for annual checkups and other medical consultations. From our busy work schedules to fighting traffic, the loss of time can add up quickly. Also, an average patient can expect to wait around 18 minutes at a healthcare facility before being seen by a doctor, further compounding the inconvenience problem.
Of course, all attention is now on the escalating health crisis. According to the latest read from the Centers for Disease Control and Prevention, new daily coronavirus cases hit nearly 193,000 on Nov. 20, bringing the seven-day moving average to almost 165,000 cases. Obviously, this is a terrible outcome for the nation, especially heading into the coldest months of the year. Cynically, though, this raises the profile of TDOC stock.
Since Covid-19 cases started exponentially infecting people inside our borders, Teladoc shares have generally tracked the ebb and flow of new infections. It’s not a perfect correlation by any means; after all, as a publicly traded company, there are other factors involved beside a potential demand uptick. Still, TDOC stock has enjoyed extreme relevancy at a time when other industries are facing an existential crisis.
At the same time, while coronavirus cases have been skyrocketing since late October, TDOC stock has charted — up until recently — a downtrend. It begs the question of whether the pandemic will continue to be a positive catalyst for shares.
Frankly, it’s a fair question. Like any health-related crisis in human history, this too shall pass. But Covid-19 can still facilitate bullishness in Teladoc, even if the crisis fades away. Let me explain.
TDOC Stock to Benefit from a Cultural Rethink
For one thing, the present massive surge in coronavirus cases only disincentives visits to healthcare facilities for all but the most urgent reasons. According to the peer-reviewed medical journal The Lancet, concerns still exist about Covid-19 infections, whether personal protective equipment is used or not:
Compared with front-line health-care workers who reported adequate availability of PPE, those with inadequate PPE had an increase in risk. However, adequate availability of PPE did not seem to completely reduce risk among health-care workers caring for patients with COVID-19.
About the only sure way of avoiding the coronavirus is to not put yourself at risk in the first place. Thus, as infections continue to jump to ridiculous levels, the narrative for TDOC stock should improve. With telehealth services, the only virus you have to worry about is the digital kind.
More importantly, though, irrespective of whether this is the last surge or not, we could see at least a semi-permanent cultural shift in how we view infectious diseases. For instance, a combination of flu epidemics in early 20th century Japan and the practice of the greater good principle resulted in the country’s embrace of face masks well before the SARS-CoV-2 outbreak.
True, Americans are very individualistic; hence, some of the wild conflicts and behaviors among the never-maskers crowd. Still, it’s very much possible that social distancing and/or mitigation practices could become commonplace in the decades ahead.
While I don’t think older Americans will ever embrace the greater good principle seen in Asian countries, a high likelihood exists that Generation Z will catalyze a new way forward. According to The Washington Post, an “economic crisis in your teens can alter your behavior for life.”
Given that the coronavirus pandemic is both a health and economic calamity, it’s hardly unreasonable to believe that a cultural paradigm shift will materialize. If so, that puts TDOC stock in the driver’s seat for the long haul.
Teladoc Enjoys a Brand Awareness Advantage
Another point to consider for Teladoc Health is the psychological fear prospective patients have about visiting the doctor. According to NBC News, many people are crippled with anxiety about the idea of seeing a medical professional for an evaluation:
If you’ve experienced something similar, you’re not alone. In fact, it’s a pretty common experience to feel reticent about going to the doctor, said Dr. Barbara Cox, a psychologist based in San Diego. She explained that while this fear has many triggers — including having iatrophobia, the medical name for fear of doctors that affects just 3% of the population — the primary culprit is anxiety triggered by a fear of getting bad news.
“Many people feel anxious because they fear the unknown, and they let their imagination run wild,” she says. “They may imagine a worst-case scenario, when in fact going for, say, an annual check-up is the best prevention.”
Of course, iatrophobia is a general tailwind for the telehealth industry, which includes American Well (NYSE:AMWL) and Reliq Health Technologies (OTCMKTS:RQHTF). Over time, I believe the narrative will be more than big enough to support these rivals.
However, in my view, Teladoc was in the right place at the right time. Further, the coronavirus pandemic established its brand as the go-to platform for contactless medical consultations. With the likely cultural shift about to take place, TDOC makes a strong argument for being the number one telehealth stock to buy.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.