On Nov 21, 2016, we uploaded our research report on Teladoc Inc. TDOC, the first and the largest telehealth solution provider with approximately 70% market share.
The company’s revenues have grown 98% at a CAGR from 2013 to 2015. It boasts more than 7000 clients.
The company plans to cash in on significant unmet needs since the telehealth industry remains significantly underpenetrated (by less than 0.5%). Teladoc is seeing its business growing steadily with insurers and customers increasingly embracing telehealth. The company’s revenues have grown at a CAGR of 98% from 2013–2015. This revenue growth was driven by a CAGR of 40% year over year in membership and a 113% increase in visits in 2013–2015. The third quarter of 2016 marked the fifteenth consecutive quarter in which the number of telehealth visits increased faster than its member base, reflecting a trend of rapidly increasing adoption of this service.
The company also made some acquisitions recently which will help it to grow inorganically. It has completed four acquisitions – Stat Health Services Inc, Compile, Inc. “BetterHelp”, AmeriDoc and Consult A Doctor since its inception. These have expanded its distribution capabilities and broadened its service offering. Last month, the company announced that it will acquire HealthiestYou, which is expected to extend its leadership position in the telehealth industry.
Nevertheless, Teladoc has incurred significant losses in each reporting cycle since 2013. As of Dec 31, 2015, the company had an accumulated deficit of $130.5 million. These losses and accumulated deficit reflect the substantial investments made by the company in acquiring new clients, building its proprietary network of healthcare providers and developing its technology platform. The company’s prior losses, combined with its expected future losses, have had and will continue to have an adverse effect on its stockholders’ equity and working capital.
The telehealth market is in an early stage of development. Nonetheless, it is intensely competitive and, can pose challenges in the company’s path to success.
Teladoc carries a Zacks Rank #3 (Hold). Investors may consider players like Biocept, Inc. BIOC Cancer Genetics, Inc. CGIX and UnitedHealth Group Inc. UNH . Each of these stocks carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Biocept delivered positive surprises in two of the last four quarters, with an average beat of 2.02%.
Cancer Genetics beat expectations in three out of the last four quarters, with an average beat of 9.49%.
UnitedHealth delivered positive surprises in each of the last four quarters, with an average beat of 3.86%.
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