If there’s one healthcare stock on the market that offers a bet on the future, it’s Teladoc (NYSE:TDOC). The virtual healthcare company saw a marked pop when the coronavirus from China started to shake investors’ nerves, and TDOC stock saw a whopping 13.3% decline on Wednesday.
But the case for TDOC stock is long term, so whether you own shares already or are looking to pick up a bargain, this healthcare play is worth considering.
Since the beginning of March, Teladoc has fluctuated between $116 and $167. Those wild swings are in large part due to the coronavirus-related panic that’s hitting the market.
But the company’s future growth story is undeniable, making now a good time to start building a position.
TDOC Stock Offers the Healthcare Everyone Wants
Teladoc offers people the ability to connect with a healthcare professional virtually. The benefits of Teladoc’s subscription-based service are not hard to imagine in the best of times. But with worries about the outbreak keeping people inside, Teladoc’s value is amplified.
Experts predict that the coronavirus will have far-reaching economic and social impacts. And these social impacts are what will boost Teladoc’s popularity. Social distancing measures are likely to remain in place for a while, and many expect daily interactions to change forever.
As Teladoc CEO Jason Gorevic put it, “The demand has shifted forever on virtual care, and we’re on the verge of a new era for virtual care in the healthcare system.”
In the past, employees treated showing up to work sick as worthy of honor. Now, people are more mindful than ever about spreading germs, and that mindset is likely to stick. Teladoc caters to this trend by allowing potentially sick individuals to consult doctors without waiting-room germs.
Even before the coronavirus was on everyone’s minds, Teladoc’s virtual healthcare concept was popular. The firm saw total “visits” rising 57% and subscription fees boosting revenue by 32% in 2019. People like the idea of seeing their doctor from the comfort of their homes — it’s a luxury that saves time and money.
Employers like it too. Teladoc helps reduce the cost of healthcare by 28% according to the company’s analyst day presentation. Just by comparing the cost of a doctor’s visit — $472 in person against $45 for a virtual visit — you can see Teladoc’s appeal.
Teladoc Is a Clear Winner
As virtual healthcare gains popularity, we’re likely to see only one or two winners in the space. Why? It would create headaches if doctors had to juggle several platforms.
Because of this, telemedicine options are likely to stay streamlined. Only one or two will emerge victorious.
For now, Teladoc looks to be a leader of the pack. The firm claims the largest market share with 50 million active users. That’s a lot of momentum that will be hard to stop in the weeks to come, especially as the company continues to gain traction as a first mover amid the coronavirus outbreak.
The Bottom Line on Teladoc Stock
TDOC stock was a good pick before the coronavirus and it’s an even better one now. Earlier this month, President Donald Trump announced plans to expand telehealth coverage under Medicare. These changes should bring an entirely new demographic into the virtual health market.
Teladoc’s unparalleled size has given the firm an advantage over smaller competitors. Teladoc is simply better able to connect customers with one of its 50,000 clinicians. Teladoc’s revenue and user base will both grow substantially over the next few years as virtual medicine gets a kick-start from the coronavirus crisis.
With the current market’s volatility still a concern, it may not be wise to dump your life savings into TDOC stock now. But there’s no reason not to start building a long-term position.
Matthew McCall left Wall Street to actually help investors — by getting them into the world’s biggest, most revolutionary trends BEFORE anyone else. The power of being “first” gave Matt’s readers the chance to bank +2,438% in Stamps.com (STMP), +1,523% in Ulta Beauty (ULTA) and +1,044% in Tesla (TSLA), just to name a few. Click here to see what Matt has up his sleeve now. Matt does not directly own the aforementioned securities.