During 2020’s emergence of the Covid-19 pandemic, telemedicine specialist Teladoc Health (NYSE:TDOC) was briefly a darling of the markets. For a while, Wall Street was absolutely enamored with TDOC stock.
The investing community can be quite fickle, and sentiment can turn ugly without warning. As Covid-19 vaccines became widely available and people ventured out to doctors’ offices again, Teladoc quickly fell out of favor.
Is it possible that investors are ignoring Teladoc’s vast and rapidly expanding addressable market? After all, even though Covid-19 vaccines are widely available now, the telehealth business can still be profitable.
Furthermore, Teladoc is making headway in connecting patients with qualified medical practitioners, while also strengthening a crucial alliance which could bring virtual care to more folks who need it.
A Closer Look at TDOC Stock
As I alluded to earlier, the onset of the Covid-19 pandemic thrust Teladoc into the spotlight last year. Consequently, TDOC stock rallied from $85 to $240 during the first half of 2020.
This momentum continued into early 2021, with Teladoc shares topping out at $308 in February. Then, the sellers took control of the price action.
Painfully, TDOC stock sank below $150 in May, and then below $100 in early December. As of Dec. 17, the share price is a little over $95.
In other words, you may have a chance to take a position in Teladoc at pre-Covid-19 levels. If you believe that telemedicine has a strong future, then you could find a rare investment opportunity here.
Room to Grow
Given the bearish momentum in TDOC stock, you might assume that Teladoc’s prospects for profitability are poor. Yet, the data says otherwise. According to Teladoc, the company’s total addressable U.S. market is a whopping $261 billion.
Meanwhile, the company’s estimated 2021 revenue is only $2 billion. Hence, Teladoc’s slice of the fiscal pie could get bigger in the coming years.
This doesn’t mean that Teladoc isn’t aggressively marking its territory within this niche market, however. Notably, 92 million patients, or around 31% of insured lives in the U.S., have access to a Teladoc product.
As a basis of comparison, Teladoc estimates that there are around 298 million total U.S. insured lives. So again, there’s room for this company to grow.
Moreover, the company won’t just profit from primary care. From 2021 to 2024, Teladoc is targeting a compound annual growth rate (CAGR) of 30% to 40% for mental health care, and 25% to 35% for chronic condition care.
Expediting Access to Care
Make no mistake about it: Teladoc is doing what’s necessary to reach more lives, as soon as possible. As evidence of this commitment, Teladoc is expanding its exclusive relationship with the National Labor Alliance of Health Care Coalitions (NLA) to offer its full suite of virtual care products and services.
The NLA is the largest alliance of labor unions and labor management coalitions. With this collaboration expansion, a range of Teladoc’s services will be available to the NLA’s coalitions, their member funds and their six million members across all 50 U.S. states.
Kelly Bliss, president of US Group Health at Teladoc Health, noted the win-win scenario that this extended alliance will provide.
“We are excited to expand our partnership with the National Labor Alliance as they fully embrace the value of whole-person virtual care to help reduce costs, expedite access to care and improve overall quality of care,” Bliss clarified.
The Bottom Line
If Wall Street doesn’t like Teladoc Health right now, that’s not a problem at all. Really, it’s just a chance to own TDOC stock at prices not seen since the pre-Covid-19 days.
It’s not every day that we get to practically turn back the clock like this, and invest in a company that’s making its mark in a fast-growing, high-conviction niche market.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.