About 75% of large employers and most of the biggest insurers are offering telemedicine to their employees and members to reduce the likelihood of expensive emergency room visits and unnecessary visits to urgent care centers. The trend has been a boon to Teladoc (TDOC 0.26%), one of the largest telehealth companies, despite only a small proportion of patients using the service. Is Teladoc's future bright?

In this clip from The Motley Fool's Industry Focus: Healthcare, host Shannon Jones and Motley Fool contributor Todd Campbell discuss Teladoc's business model, as well as its opportunity to grow outside the United States.

A full transcript follows the video.

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This video was recorded on Nov. 14, 2018.

Shannon Jones: Let's talk about the first stock that was brought up. This company is at the forefront of revolutionizing the healthcare delivery model with their drive for telemedicine. That company is Teladoc Health, ticker TDOC. The stock is up about 67% this year versus the S&P up only about 2% on the year. At one point, this stock was up almost 150%, but it's had some turbulence over the past month or so. We'll dive into that. Right now, the company is trading at about $58 a share, down from $86 a share. Todd, it sounds like this might actually be a good buying opportunity for a company that is really on the leading edge.

Todd Campbell: Full disclosure here, I wrote an article for The Fool about two weeks ago, where I said, three growth stocks I want to buy the next time we get a sell-off. And one of those was Teladoc. And sure enough, we got a sell-off. And I'm beyond our restrictions, so I can talk about it. I did indeed go out and buy Teladoc on that recent weakness.

It's a small position. I always say on the show, you've got to diversify. It's only a 2% position for me. But I did feel that the opportunity long-term here warrants it being in my growth portfolio so I went out and I took a little bit on that weakness. It's a fast-growing company. It's about a $4 billion market cap company. In the third quarter, its sales grew about 62% year over year to $111 million.

Jones: Fascinating, the growth story here. When you look at how the company has been growing, they've been doing it through smart acquisitions, which I think is a very smart strategy for them. If you look at their revenue over the past five years, it's been growing at a compound annual growth rate of 75%. Granted, the company is still not profitable. I think they'll get there over time. But this is a company who is really defining what telemedicine, telehealth, will look like. They use a subscription-based model that's certainly helping them to get over that finish line into profitability.

Campbell: You highlighted the growth. There's a couple different numbers I want to hammer home for our listeners here. In 2016, Teladoc did about 952,000 telehealth visits, a little less than a million. In 2017, they did almost 1.5 million telehealth visits. If you look at last quarter, they did 641,000 visits. If you analyze that out, that gets you a run rate of around 2.4 million visits. Think about that statistic I shared with you earlier today about the total number of primary care and outpatient hospital visits per year. Over a billion.

Am I worried that this company is losing money right now? Obviously, you have to watch and see how that progresses, but no. I'm totally fine, as a growth investor, with them going out and investing back out into their business, with the assumption that there's still a tremendously long runway for this company.

Jones: Absolutely. Talking about the revenue growth, that 62% that you mentioned does include growth from its recent acquisition of Best Doctors. But even on the organic front, organically, revenue grew 29% in the third quarter. Another thing that really stands out for me with Teladoc is the fact that they've got a global footprint now. They've got operations in North America, South America, Europe, Asia, Australia, and more than 12,000 clients in over 125 countries. It's astounding to me how quickly they've been growing. I know this stock in particular has been a favorite among many Fools here. I believe even David Gardner is very bullish about this stock.

Campbell: Of the three biggest players in telemedicine, it's the only pure-play that we as investors can buy right now. I think that's one of the other reasons that it catches a lot of attention of investors. You mentioned the global growth opportunity. We shouldn't forget, they just went out this past summer, they bought Advance Medical for $352 million. That gives them another $63 million in recurring revenues. Advance Medical is global. Most of their business comes from outside the U.S. This isn't an opportunity that's limited to simply the U.S. market.

Then, going back and looking at that broader market opportunity again, by Teladoc's calculation, they think that roughly 417 million of the over 1 billion visits per year could be handled through telehealth. 417 million. Again, from my perspective, pretty much just scratching the surface. They did update their guidance when they put out their most recent quarterly numbers. That reflects this recent acquisition. They're now expecting between $414-416 million in revenue for the full year. They're going to lose between $1.48-1.50 per share.

Jones: Another growth opportunity that I'll point out is the fact that Medicare's Advantage plan could actually now include telehealth visits as a part of their coverage for their 2020 plan year. This is a huge opportunity for the industry itself but specifically for Teladoc, with their size and scale. That would mean they could offer their full suite of services to all 21 million Medicare Advantage enrollees. A huge opportunity, and really a great way to increase their U.S. paid membership base.

We mentioned at the beginning that there was a sell-off. The markets have been quite volatile over the past two months. Teladoc in particular fell about 12% in early November for a couple of different reasons. One was investors reading through because of insider selling, basically. The COO and CFO had a personal sale of about $700,000 worth of stock. I think investors got scared by this, especially with it being so close to earnings. They thought there was a readthrough to earnings. But if you actually dig a little bit deeper, these were shares that he had already planned to sell, and he'd planned to do this five months prior. So, really a non-event there. And then, of course, as is the case with most growth stocks, there's always the short seller on the prowl. Actually, we've got a great article. If our listeners want to check it out, Keith, one of our writers, on November 5th, wrote an article entitled Why Teladoc Health Tanked Today. He really went through and piece by piece deconstructed that entire thesis, and why Teladoc is still a strong performer.

Campbell: The short sellers were calling into question some of the marketing that they do through affiliates. Yes, you're always going to have these moments in time where people will take shots at them. I think that you ignore that as an investor. Stay focused on the long-haul opportunity. That's one of the reasons that I was willing to step in and pick some up for my own portfolio.

One of the things I want to go back to is that Medicare thing is pretty huge. To put 21 million people in perspective, right now, the way the company makes its money is selling subscriptions to payers, like employers and insurance companies, to cover a certain number of people per month. They cover about 23 million people right now. So, that represents a really, really significant potential to boost its addressable market.

Jones: All around, certainly a great stock, and now could be one of the best times to get in or add to a current position.