On August 25, 2020, I said that there was a fire sale you as a savvy tech investor could take advantage of with Teledoc Health Inc. (TDOC).
Wall Street analysts were worried about Teledoc buying Livongo Health Inc. (LVGO) and the $18.5 billion price tag. But I know this was a big move that would add to TDOC’s lead in the shift to telemedicine.
Livongo makes devices that allow healthcare providers to remotely monitor health metrics such as blood pressure, blood sugar, weight, even behavioral health. Together they allow physicians and nurses to speak to patients remotely while having the most up-to-date information on their health.
I made it clear back then that I expected Teledoc to bounce back and beat the market.
From the day shares hit a bottom on November 10 to its recent high on February 19, TDOC zoomed some 69.6%.
Over that period, it crushed the S&P 500 by a stunning 640%.
Now, history is repeating itself, and this massive profit opportunity is coming back around. The stock is grossly oversold once again, and I see a similar setup in the making as the firm disrupts the $1.3 trillion medical market.
Here’s the thing.
According to a survey from The Harris Poll, 65% of consumers surveyed plan to use telehealth services more often after the pandemic, putting paid to Wall Street’s ridiculous notion that we’re just itching to go back to the doctor’s office.
This is still a move well worth making.
Let me show you what’s really going on and how you can clean up from Wall Street’s mistake…
The Modern Appointment
Here’s some more proof that Wall Street’s idea that we’re all going to go back to our old ways of dealing with doctors once the majority of Americans are vaccinated is total bunk.
Neither my wife nor I have been to the doctor for any routine medical appointments. We do it all by phone and video.
It’s faster, much less hassle and there’s no worry of catching a virus from a sick patient in the waiting room.
We’re far from alone. Back in 2017, the American Hospital Association said the number of medical providers using telehealth had doubled in just seven years.
Industry analysts note that in March 2020 virtual visits rise by 1,000% and then by 4,000% the next month.
That’s a great set up for a leading provider like Teledoc.
As you might remember, Teladoc’s telemedicine platform allows physicians to reach patients at home, pharmacists to run virtual clinics without a scheduled appointment, and medical records to be shared seamlessly across providers.
Teladoc’s position as the global leader in virtual medicine comes with a number of advantages here. Not only are chances high that a patient’s other healthcare contacts also use the same platform, making everything work better.
But Teladoc’s huge network includes physicians in over 450 subspecialties. So, whatever ails you, chances are Teladoc has someone who can help.
Now that might sound like a given. But remember, there’s not a single urgent care or family medicine office in the country that has physicians from 450 different subspecialties. Most hospitals can’t reach this number either.
That means every patient can be matched with the care team that’s exactly right for them, no matter where they live. And because it’s all online, Teladoc’s services are available 24/7, year-round, no matter what the weather or traffic is like.
All the while, Teladoc’s platform maintains the strictest health-privacy regulations and clinical-care guidelines.
By the Numbers
Despite Wall Street’s mistaken belief that telemedicine was just a fad, the number of “visits” using Teladoc’s platform has been growing at a compound annual growth rate of over 80%.
Recurring revenue has also jumped by more than 80%. And with Teladoc’s client list, that’s no surprise.
See, over 40% of Fortune 500 companies use Teladoc, and over 600 health systems use the firm’s platform. That means that by the end of last year, Teladoc’s network included over 11,000 physical care locations, for when a virtual visit wasn’t enough and you needed hands-on care.
Teladoc also recently closed its merger with Livongo, a firm that makes medical devices that allow healthcare providers to remotely monitor health metrics such as blood pressure, blood sugar, weight, even behavioral health.
Together, the two firms make for a great fit. They allow physicians and nurses to speak to patients remotely while having the most up-to-date information on their health.
In fact, that information, gathered throughout the day, can be more accurate than a single test given at the doctors ‘ office.
And the firms are already looking at using AI to give people customized “nudges” to become healthier and help personalize their treatment plans, based on all this information.
As of today, the overlap between Teladoc and Livongo customers is already about 25%. As that number grows, the benefits to patients and the company both will increase.
You’ll remember that when we spoke about Teladoc back in August, I saw the merger with Livongo as a key catalyst for Teladoc’s stock.
The stock’s returns since have proven my point.
Ironically, the merger is also one of the reasons Teladoc is now out of favor on Wall Street. See, after the merger, the company reported sharp losses.
However, the vast majority of that had to do with accounting for stock-based compensation, not operations.
In other words, most of these “losses” don’t actually involve Teladoc losing any money.
Meanwhile, over the past three years, the company’s sales have grown at an average of 56%.
If earnings just hit half that rate, they would roughly double in 2.5 years.
This shows the power of going against the grain and investing in an unstoppable tech trend that can accelerate your net worth.
Cheers and good investing,
Michael A. Robinson
Source: Strategic Tech Investor