Funny how volatile the markets can be. In 2020 everyone loved the telemedicine specialist Teladoc Health (NYSE:TDOC). Yet this year, investors have almost completely ditched TDOC stocks. Certainly, Covid-19 vaccines are more widely available to the public than they were in early 2020.
This could explain why Teladoc Health is no longer the Wall Street darling it once was.
However, recent news of an emerging variant of Covid-19 (apparently named omicron) has reminded people how important telemedicine really is. It is surely no coincidence that on November 26, the Dow Jones Industrial Average had its worst day of the year so far, as TDOC stock rose 3.41%.
With that in mind, let’s take a look at Teladoc and see if there’s a potential turnaround in store. Even before the newly identified Covid-19 variant, it’s entirely possible that Teladoc was oversold and underrated.
A closer look at TDOC’s stock
As I mentioned earlier, Teladoc was once a shining star of the markets. In the midst of the onset of the Covid-19 pandemic last year, TDOC stock rose from $ 85 to $ 240 in the first half of 2020.
The phase of hype persisted until early 2021, with Teladoc shares reaching $ 308 in February. With hindsight, it is obvious that this momentum was too long, too fast.
Most of 2021 has been painful for long-term holders of TDOC shares, unfortunately. Even after the 3.41% peak on November 26, the stock price is still around $ 101, which is a major loss for people who bought stocks near the top.
For now, shareholders must be patient and realistic. Getting back to $ 150 would be a reasonable target for loyal Teladoc investors.
Remove health barriers
Teladoc Health is not only a leader in the telemedicine market. The company is also an innovator. One of Teladoc’s goals is to make virtual health accessible to as many patients as possible.
To achieve this, the company makes its primary care service, Primary360, available to commercial health plans, employers, and other organizations that sponsor health care for individuals and families in the United States.
Primary360 was originally launched as a pilot program two years ago, but has grown significantly since then. Through this program, members can have access to a Teladoc primary care physician.
They may also receive assistance from a care team offering a range of services, including advice for an individual’s care, as well as navigation to high-quality networked providers in person.
In addition, each patient can get a personalized care plan that includes reminders for follow-ups and action items. Additionally, Primary360 can speed up access to virtual healthcare, as Teladoc doctors are currently available within a week for a new patient visit in all 50 US states.
Telemedicine is alive and well
Thus, Primary360 is emblematic of how Teladoc is ambitiously advancing telehealth in the United States. Still, the folks on Wall Street will tend to focus on tax matters. Does Teladoc generate solid revenue or not? The company’s third quarter 2021 results should allay any concerns about it.
In those three months, Teladoc’s revenue grew 81% year-on-year to $ 522 million. Perhaps that should rule out any notion that the telemedicine market is a relic of the past.
Additionally, Teladoc has updated its revenue outlook for the year 2021 to a very healthy range of $ 2.015 billion to $ 2.025 billion.
On top of all this, the total number of Teladoc visits in the third quarter of 2021 topped 3.9 million. This is 37% more than the number of visits recorded in the third quarter of 2020.
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 investors need to understand.
With this we have a countercurrent opportunity in a beaten stock. As Teladoc works diligently to make virtual healthcare more accessible, we hope the company will receive the respect it deserves on Wall Street in the near future.
At the date of publication, David Moadel did not hold (directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.
David model provided compelling content – and at times crossed the line – on behalf of Crush the Street, Market Realist, Talk Markets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He is also a chief analyst and market researcher for Portfolio Wealth Global and hosts the popular YouTube financial channel Looking at the Markets.