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Teladoc (TDOC) Hits New 52-Week High on Strong Q4 Results

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Teladoc Health, Inc. (TDOC - Free Report) hits a fresh 52-week high of $148.00 on Feb 27, before closing the day at $135.15. Strong fourth-quarter 2019 results on solid revenue growth and improved operational efficiency contributed to the rally.

Shares of the Zacks Rank #3 (Hold) stock has surged 100% in a year, significantly outperforming the industry’s decline of 22.1%.

Let’s delve deeper into the factors responsible for the stock’s upsurge.

Teladoc’s fourth-quarter 2019 loss of 26 cents per share was narrower than the year-ago quarter’s loss of 35 cents per share. The improvement was primarily on the back of strong revenue growth, arising from increased demand for the company’s service offerings.

Notably, its fourth-quarter 2019 revenues of $156 million rose 26.8% year over year. The upside can be attributed to the strong performance of its revenue components — subscription access fees and visit fees.

Revenues from subscription access fees (which comprised 81% of total revenues) increased 24% year over year to nearly $127 million. Furthermore, total visits of 1,239,000 were up 44% year over year on membership gains in the U.S. visit fee only and international visits.

Teladoc has been working to boost top-line growth on buyouts. The company’s revenues have witnessed a CAGR of 63.5% between 2015 and 2019.

Its inorganic growth story also impresses. In the last month, the company entered an agreement to acquire InTouch Health, the leading provider of enterprise telehealth solutions for hospitals and health systems.  Given its wide range of healthcare solutions, the deal will make Teladoc a leading provider of virtual care for health systems. We believe such acquisitions are going to drive the company’s shares going forward.

Despite several downsides such as certain unprofitable operations, we are hopeful that the company will win back its momentum, owing to its solid fundamentals like growing top line.

Stocks to Consider

Some better-ranked stocks in the medical space are Cardinal Health, Inc. (CAH - Free Report) , UnitedHealth Group Incorporated (UNH - Free Report) and IDEXX Laboratories, Inc. (IDXX - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

All three stocks beat the Zacks Consensus Estimate in the last reported quarter by 25.6%, 3.45% and 14.29%, respectively.

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