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Here's Why You Should Add Teladoc (TDOC) to Your Portfolio

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Teladoc Health, Inc. (TDOC - Free Report) has emerged as a lucrative investment option, courtesy of its enhanced telehealth services, series of buyouts and tie-ups, and strong cash position.

The stock currently has a Zacks Rank #2 (Buy) and a Growth Score of A. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Our research shows that stocks with a Growth Style Score of A or B when combined with a Zacks Rank of 1 or 2, offer the best growth prospects.

Factors Driving the Company

Solid Prospects: The Zacks Consensus Estimate for 2021 earnings indicate growth of 58.1% from the year-ago figure. Also, the same for revenues reflects improvement of 80.9% from the prior-year figure.

Strong Earnings Surprise History: Teladoc has a trailing four-quarter earnings surprise of 4.93%, on average.

Positive Estimate Revision: The Zacks Consensus Estimate for 2021 earnings has been revised upward by 13% over the past 30 days.

Business Tailwinds: The company’s revenues have been growing courtesy of higher membership and patient visits, which have been driven by its unparalleled expertise and advanced technologies. Case in point, Teladoc has completed more than 14 million visits last year. With more than 11,000 care locations across the United States, the company has reinforced its position as a leading virtual care provider in the country. Its revenues have also seen a four-year CAGR of more than 70%. The company has made use of its well-established data and personalized insights, which has paved the way for it to offer whole-person care at affordable costs. Notably, the company anticipates average annual revenue growth of 30-40% through 2023.

Moreover, Teladoc has undertaken a series of buyouts and collaborations, which have been in line with the company’s endeavor of enhancing healthcare capabilities and diversifying treatment network. One of the most recent tie-ups includes the one with Dexcom. Per the partnership, both the companies will launch a pilot, which will show the impact of continuous glucose monitoring (CGM)-powered insights for people with Type 2 diabetes.

The COVID-19 pandemic induced stringent lockdowns and social-distancing measures worldwide has fueled teleheath visits, which in turn has benefited Teladoc. People were compelled to adopt telehealth visits as the only feasible option to seek medical help, which led to an uptick in demand for remote medical services. While the global telehealth and telemedicine market is projected to witness a CAGR of 37.7% over the 2020-2025 forecast period according to MarketsandMarkets, Teladoc remains well-poised to gain courtesy of its intensified focus on enhancing existing suite of telehealth services.

Other stocks in the medical space, namely UnitedHealth Group Incorporated (UNH - Free Report) , Humana Inc. (HUM - Free Report) and Magellan Health, Inc. (MGLN - Free Report) , have also developed telehealth services.

Coming back, Teladoc boasts of a robust cash balance, which aids the company in pursuing several growth-related initiatives. Also, the company remains optimistic about generating sufficient cash flows in the days ahead.

Price Performance

Shares of Teladoc have soared 138.8% in a year compared with the industry's growth of 21%.

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