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Why Teladoc Health Stock Jumped 17% in September

By Joe Tenebruso - Oct 10, 2019 at 8:35PM

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Investors are beginning to catch on to the immense potential of virtual healthcare.

What happened

Shares of Teladoc Health (TDOC -4.41%) popped 17% last month, according to data provided by S&P Global Market Intelligence, following a pair of announcements that suggest the growth of telehealth services is accelerating.

So what

On Sept. 4, Teladoc announced a deal with Johnston Group, a provider of employee benefits solutions. The agreement will give more than 30,000 small businesses in Canada access to Teladoc's telemedicine services, which help healthcare professionals provide care to patients remotely via telecommunication technology, such as videoconferencing. 

A person with a blood pressure cuff on their arm having a videoconference with a doctor.

Telemedicine is becoming more popular among patients and doctors alike. Image source: Getty Images.

Later in September, news broke that (AMZN -0.40%) was making a bigger move into healthcare services. Amazon Care will provide the e-commerce titan's employees in Seattle with in-person and virtual care services. This includes text-based chats with nurses, video visits with doctors, in-home nurse visits, and prescription deliveries.

While some investors rightfully view Amazon Care as a potential threat to Teladoc, others see it as another sign that telemedicine is beginning to catch on in a big way. Some analysts even suggest that Amazon could eventually attempt to acquire Teladoc as a means to further its healthcare ambitions.

Judging by Teladoc's hefty gains in September, more investors appear to be taking the optimistic view.

Now what

Healthcare is a $6.5 trillion industry. As such, there's plenty of room for both Teladoc and Amazon to grow their telehealth offerings in the coming years. And should these two innovators decide to partner in the future, it would create a powerful new force in the massive global healthcare market.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and Teladoc Health. The Motley Fool has a disclosure policy.

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Teladoc Health, Inc. Stock Quote
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$34.37 (-4.41%) $-1.58, Inc. Stock Quote, Inc.
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