Somebody call a doctor, because telemedicine play Amwell (NASDAQ:AMWL) needs help. Shares are plunging on Tuesday, down nearly 12% with just a little left in the trading day. Without any company news, what has AMWL stock suffering? And what else do investors need to know?
To start, what exactly is Amwell? Well, the company is another player in the red-hot telemedicine market. Essentially, Amwell serves enterprise clients, providing the solutions necessary to embrace a digital healthcare model. Plus, individual patients can book online appointments for therapy, nutrition counseling and so much more.
Investors should also note that Amwell is a relatively new entrant to the public markets. In fact, AMWL stock just began trading in September 2020. At the time, many investors cheered on its IPO because of novel coronavirus catalysts. And AMWL stock has not disappointed. Since coming public, shares have added nearly 30%. Importantly, this success comes at a time of great disruption and innovation for the healthcare industry. Appointments moved online. Doctors closed their offices for non-essential appointments. Patients made critical decisions about their health and safety, often from the comfort of their bed or couch.
But if this is the case, what has AMWL stock down so far today?
There is no clear answer. However, it seems that investors are a bit worried about the post-pandemic reality for Amwell. The company has already tacked on big gains, and it is currently trading at more than 2o times sales. Plus, many investors might be worried that the post-pandemic future will bring more patients back to physical offices. This fear comes as Pfizer (NYSE:PFE) and BioNTech (NASDAQ:BNTX) roll out their vaccine in the United States, and as Moderna (NASDAQ:MRNA) preps to receive emergency-use authorization.
Is that really reason to panic about AMWL stock?
AMWL Stock and the Post-Pandemic Future
To answer that question, it is important to really dive into the narrative. Essentially, some investors may be worried that mass vaccination will bring about a return to normal in the U.S. Part of this return to normal may cause telemedicine companies to come to a screeching halt. With resources going into such mass vaccination, and the first round of shots starting yesterday, these fears are top of mind.
But that does not alone seem like a worthy reason for a plunge in AMWL stock. In fact, peer Teladoc (NYSE:TDOC) is positive in Tuesday trading. This means that the dip in Amwell could very well be shares giving back some of their huge gains.
Think about it. Before the novel coronavirus left its mark on the world, experts were predicting that telemedicine would be one of the trends that defined this decade. Why not — telemedicine stands to make life easier, more convenient and disrupt broken aspects of our healthcare system. If those predictions were right, Covid-19 just accelerated an existing trend. After the pandemic, we will then continue to see more resources flow into the space. If anything, if you believe in the long-term narrative for AMWL stock, that would be a good thing.
For now, keep this company on your radar. Wait for more news, or at least more rumors, to break.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.
