Teladoc Health Is a Name to Accumulate on the Dip

2020 has been a crazy year. Some stocks have fallen 90%; others have risen 900%. Some industries are in turmoil, while others are experiencing the best growth imaginable. For better or for worse, Teladoc Health (NASDAQ:TDOC) is experiencing strong growth this year. As a result, TDOC stock is up 126% in 2020. 

Teladoc Health (TDOC) logo on a mobile phone screen
Source: Piotr Swat / Shutterstock.com

It’s not a black-and-white situation though. 

First, Teladoc has been raging higher this year as telehealth has been thrust into the spotlight. This drove up growth significantly, as more and more people turned to alternative meetings with health professionals. 

This also accelerated the growth rate for Livongo Health, which was leveraging technology in the healthcare space as well. It’s my belief that the two companies will continue to reap massive rewards in this space over the long term. Yes, the novel coronavirus accelerated growth in the short term. But that should help boost retention and awareness around its platforms.

If you’re wondering why I’m speaking of both companies, it’s because Teladoc and Livongo have recently merged. 

Breaking Down Teladoc 

In the company’s own words:

“Teladoc Health delivers, enables, and empowers virtual care services that span every state in a person’s health journey — from wellness and prevention to acute care to complex healthcare needs. We use proprietary health signals and personalized interactions to drive better health outcomes across the full continuum of care.”

In essence, it’s leveraging technology using a “scalable, secure platform.” Further, Teladoc’s “award-winning member experience and analytics-driven engagement services deliver industry-leading utilization and satisfaction, accelerating the adoption of virtual care.”

This is the type of secular growth I crave when looking for growth stocks with a long runway. Did Teladoc and Livongo stocks soar higher on the realization that telehealth would spike in 2020? Yes, and even if there is a deceleration in that growth rate, this is a type of trend — like cord-cutting or e-commerce — that simply won’t go away. 

Teladoc was founded in 2002, while Livongo was founded in 2008. Covid-19 didn’t create telehealth growth out of thin air; it simply accelerated what was already in place. 

The company has one quarter left in its fiscal year. When it reported its Q3 results — which included results from Livongo — the company beat earnings and revenue estimates. It also raised its full-year expectations. 

For 2021, consensus expectations call for roughly $2 billion in revenue. That’s nearly double the company’s 2020 results, although that includes only two quarters of Livongo’s results. 

It doesn’t matter, though. The growth is there, the runway is long and TDOC stock is nowhere near its peak. The company’s approach tackles everything from primary care telehealth visits, diabetes treatment (via Livongo), mental health (via its BetterHelp unit) and others. 

If you want long-term growth, look no further. 

Trading TDOC Stock

TDOC stock is down 22% from the August high, and it was down more than 30% earlier this month. There’s nothing more frustrating than finding the best train, getting to the station and seeing it taking off before you get on board.

Now granted, TDOC stock isn’t down at $90 like it was in January, but the fact that we can accumulate it 20% off its high is a blessing. 

Since July, shares have been range-bound between $185 support and $230 resistance. The exceptions to this observation have been short-lived bursts above resistance or dips below support.

The stock most recently reclaimed range support and the 200-day moving average. However, it faces its declining 20-day and 50-day moving averages, and at least for the moment, appears to be struggling with the $200 mark. 

Should TDOC stock break the 200-day moving average and the November low at $168.50, more selling pressure could occur. 

Bulls looking for a dip who don’t pull the trigger — either now or in the possible short-term breakdown scenario outlined above — have no one to blame but themselves. I would view such a dip as a gift and, in fact, I already do. 

On the date of publication, neither Matt McCall 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. 

Matthew McCall left Wall Street to actually help investors –by getting them into the world’s biggest, most revolutionary trends BEFORE anyone else. Click here to see what Matt has up his sleeve now.


Article printed from InvestorPlace Media, https://investorplace.com/moneywire/2020/11/teladoc-health-tdoc-stock-is-a-name-to-accumulate-on-the-dip/.

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