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Can Teladoc Stock Keep Going After Last Week's 24% Pop?

By Rick Munarriz – Nov 26, 2017 at 7:11AM

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The telehealth leader rose every single trading day last week, following a well-received inaugural Investor and analyst day presentation.

One of last week's biggest winners makes house calls. Teladoc (TDOC 5.37%) soared 24.1% last week, making it the second best performer on the New York Stock Exchange. Teladoc moved higher after hosting its inaugural investor and analyst day. 

Monday's presentation allowed Teladoc to sell the market on the merits of telemedicine and its role as the top dog in telehealth, providing cheaper and more convenient solutions than traditional in-office offerings for many services. The stock moved higher on all four days of the abridged trading week. 

Teladoc CEO Jason Gorevic in front of banners promoting Teladoc.

Image source: Teladoc.  

The doctor will see you now

Teladoc is a fast-growing provider of telemedicine, arming a growing number of health-plan providers and their customers with cost-effective consultations with doctors and mental-health professionals. Members book their video call visits online, with the average wait for a virtual physician or health specialist clocking in at about 10 minutes. 

There are now 22.6 million paid members -- up 33% over the past year -- through its roughly 7,500 clients. These members aren't leaning hard on Teladoc. The platform is expecting to complete just over 1.4 million visits this year, so most of its members are still opting for conventional in-office consultations. However, Teladoc's reach is growing. The number of visits rose 51% in its latest quarter, once again outpacing membership growth. 

It's easy to see why Teladoc's clients are satisfied, even if they're paying for members who rarely take advantage of the video-based visits. A third-party study by Veracity Analytics last year showed that Teladoc clients saved roughly $472 per member visit, in addition to $46 in average employee productivity. Teladoc is doing its part to encourage engagement in its telehealth offering. One of the presentations during Monday's investor and analyst day detailed how it's being more proactive, like reaching out to working mothers during the back-to-school season with trending childhood maladies. Teladoc has also put out videos showing how easy it is to receive medical and mental health attention through its leading-edge platform. 

Analysts walked away impressed. Mohan Naidu at Oppenheimer bumped his price target from $40 to $45 following the presentation, encouraged by Teladoc's reasserting its dominant position in the growing telehealth industry. Richard Close at Canaccord also came out of the investor and analyst day feeling bullish. He sees Teladoc coming through with 25% to 30% growth for several years, a rare sight of heady growth among healthcare service providers, but to be fair, this more a disruptive technology company than it is a stodgy purveyor of health services.

Teladoc has been one of this year's biggest winners, and last week's move finds the stock once again more than doubling in 2017. The market's more excited about its growth and upside potential than worried about its mounting losses, explaining why last week's chance to broadcast its side of the story helped lift the hot stock higher.

Rick Munarriz has no position in any of the stocks mentioned. The Motley Fool recommends Teladoc. The Motley Fool has a disclosure policy.

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