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Teladoc (TDOC) Surges 64% in a Year: Can the Rally Continue?
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Teladoc, Inc. (TDOC - Free Report) has been in investors’ good books, courtesy of a strong and growing business in the telehealth industry that is rapidly expanding.
Despite incurring net loss over the past several years, investors are impressed with this telehealth company’s revenue CAGR of 82% during the 2013-2017 period. Notably, the company’s net loss can be primarily attributed to high expenses on marketing and business development, which are expected to pay off soon.
The stock also seemed to have gained from the company’s 2018 guidance, which expects a positive adjusted EBITDA between $12 million and $14 million. In the third quarter of 2018, the company delivered a positive adjusted EBITDA of $6.3 million versus an adjusted EBITDA loss of $0.6 million a year ago.
Notably, visits and membership growth were key revenue drivers, reflecting an increased adoption and utilization of telehealth services.
Additionally, Teladoc’s acquisitions of Advance Medical, Best Doctors and HealthiestYou fortified its distribution capabilities and broadened its service offerings.
The company’s organic and inorganic measures are also impressive, which led to business expansion. In a year’s time, shares of Teladoc have soared 64% compared with the industry’s 33% rally.
We have a conviction that the stock should be driven higher going forward.
Key Catalysts
Teladoc has announced to form a virtual care service called Teladoc Global Care for expanding its coverage beyond borders in more than 20 languages. This, in turn, will increase the availability of doctors across the globe. The new platform is likely to boost the company’s business, which is currently confined to the United States.
Furthermore, the recent regulatory development from CMS regarding the ability of Medicare advantage plans to include telehealth as part of Teladoc’s bids for the 2020 plan year bodes well for the company’s long-term growth.
This implies that CMS’ proposed rules would enable Teladoc to offer all 21 million Medicare advantage enrollees its full suite of services. CMS also underlines the benefits to access cost, convenience and quality that telehealth services provide in its proposals.
Teladoc carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the same space are BioTelemetry, Inc. (BEAT - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and AMN Healthcare Servcies Inc. (AMN - Free Report) . While BioTelemetry sports a Zacks Rank #1 (Strong Buy), the other two companies carry a Zacks Rank #2 (Buy).
BioTelemetry surpassed estimates in each of the trailing four reported quarters, the average being 55.6%.
Medpace and AMN Healthcare outpaced estimates in three of the four reported quarters, the average beat being 22.8% and 4.17%, respectively.
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It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6% and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Teladoc (TDOC) Surges 64% in a Year: Can the Rally Continue?
Teladoc, Inc. (TDOC - Free Report) has been in investors’ good books, courtesy of a strong and growing business in the telehealth industry that is rapidly expanding.
Despite incurring net loss over the past several years, investors are impressed with this telehealth company’s revenue CAGR of 82% during the 2013-2017 period. Notably, the company’s net loss can be primarily attributed to high expenses on marketing and business development, which are expected to pay off soon.
The stock also seemed to have gained from the company’s 2018 guidance, which expects a positive adjusted EBITDA between $12 million and $14 million. In the third quarter of 2018, the company delivered a positive adjusted EBITDA of $6.3 million versus an adjusted EBITDA loss of $0.6 million a year ago.
Notably, visits and membership growth were key revenue drivers, reflecting an increased adoption and utilization of telehealth services.
Additionally, Teladoc’s acquisitions of Advance Medical, Best Doctors and HealthiestYou fortified its distribution capabilities and broadened its service offerings.
The company’s organic and inorganic measures are also impressive, which led to business expansion. In a year’s time, shares of Teladoc have soared 64% compared with the industry’s 33% rally.
We have a conviction that the stock should be driven higher going forward.
Key Catalysts
Teladoc has announced to form a virtual care service called Teladoc Global Care for expanding its coverage beyond borders in more than 20 languages. This, in turn, will increase the availability of doctors across the globe. The new platform is likely to boost the company’s business, which is currently confined to the United States.
Furthermore, the recent regulatory development from CMS regarding the ability of Medicare advantage plans to include telehealth as part of Teladoc’s bids for the 2020 plan year bodes well for the company’s long-term growth.
This implies that CMS’ proposed rules would enable Teladoc to offer all 21 million Medicare advantage enrollees its full suite of services. CMS also underlines the benefits to access cost, convenience and quality that telehealth services provide in its proposals.
Teladoc carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the same space are BioTelemetry, Inc. (BEAT - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and AMN Healthcare Servcies Inc. (AMN - Free Report) . While BioTelemetry sports a Zacks Rank #1 (Strong Buy), the other two companies carry a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here.
BioTelemetry surpassed estimates in each of the trailing four reported quarters, the average being 55.6%.
Medpace and AMN Healthcare outpaced estimates in three of the four reported quarters, the average beat being 22.8% and 4.17%, respectively.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6% and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>