It’s funny how fickle the markets can be. In 2020, everybody loved telemedicine specialist Teladoc Health (NYSE:TDOC). Yet, this year investors have almost completely abandoned TDOC stock. Granted, Covid-19 vaccines are more widely available to the public than they were in early 2020.
This could explain why Teladoc Health isn’t the Wall Street darling that it once was.
However, recent news of an emerging Covid-19 variant (apparently named omicron) reminded people of how important telemedicine really is. Surely, it’s not an accident that on Nov. 26, the Dow Jones Industrial Average has its worst day of the year thus far, while TDOC stock rallied 3.41%.
With that in mind, let’s perform a checkup on Teladoc and see if there’s a potential turnaround in store. Even prior to the newly identified Covid-19 variant, it’s entirely possible that Teladoc was oversold and underappreciated.
A Closer Look at TDOC Stock
As I alluded to earlier, Teladoc was once a shining star of the markets. Amid the onset of the Covid-19 pandemic last year, TDOC stock rallied from $85 to $240 during the first half of 2020.
The hype phase persisted into early 2021, with Teladoc shares topping out at $308 in February. In hindsight, it’s evident that this run-up was too much, too fast.
Most of 2021 has been painful for long-term holders of TDOC stock, unfortunately. Even after the 3.41% spike on Nov. 26, the stock price is still around $101, representing a major loss for folks who bought shares near the peak.
For the time being, the shareholders should be patient and realistic. Getting back to $150 would be a reasonable objective for Teladoc’s faithful investors.
Removing Healthcare’s Barriers
Teladoc Health isn’t just a leader in the telemedicine market. The company is also an innovator. One of Teladoc’s objectives is to make virtual healthcare available to as many patients as possible.
To help achieve this, the company is making its primary-care service, Primary360, available to commercial health plans, employers and other organizations that sponsor healthcare for individuals and families in the U.S.
Primary360 was initially launched as a pilot program two years ago, but has been substantially built out since then. Through this program, members can get access to a Teladoc primary-care physician.
They can also receive assistance from a care team offering a range of services, including guidance for an individual’s care, as well as navigation to in-person, high-quality in-network providers.
Additionally, each patient can get a personalized care plan that includes reminders for follow-ups and action items. Plus, Primary360 can speed up access to virtual healthcare, as Teladoc’s physicians are currently available within a week for a new patient visit in all 50 U.S. states.
Telemedicine Is Alive and Well
Thus, Primary360 is emblematic of how Teladoc is ambitiously advancing telehealth in the U.S. Still, folks on Wall Street will tend to focus on the fiscal issues. Is Teladoc generating strong revenues, or not? The company’s third-quarter 2021 results should quell any concerns about that.
During those three months, Teladoc revenues increased 81% year-over-year, to $522 million. Perhaps this should lay to rest any notions that the telemedicine market is a relic of the past.
Moreover, Teladoc updated its full-year 2021 revenue outlook to a very healthy-sounding range of $2.015 billion to $2.025 billion.
On top of all that, Teladoc’s total third-quarter 2021 visit count exceeded 3.9 million. That’s 37% higher than the visit count recorded in 2020’s third quarter.
The Bottom Line
Clearly, the data shows that telemedicine is still a thriving market. Or at least, Teladoc’s business is growing, and that’s what the investors need to understand.
With that, we have a contrarian opportunity in a beaten-down stock. As Teladoc works diligently to make virtual healthcare more accessible, hopefully the company will get its due respect on Wall Street in the near future.
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.
