Shares of Teladoc Health (NYSE:TDOC) have fallen from post-pandemic peaks this summer, but the company's business hasn't stopped growing at a mind-bending pace. Now that this stock has fallen to a more reasonable valuation, Baird, an investment bank, today gave it an upgrade and a $220 price target that is 18% more than Thursday's closing price.

Analysts have been encouraged by the strong and sustained uptake of Teladoc's services throughout the coronavirus pandemic. Teladoc's network of providers delivered over 2.8 million virtual visits in the third quarter, which was more than three times the number of visits delivered during the prior-year period.

Person with binoculars looking forward.

Image source: Getty Images.

Exploding visit volume was driven by new patients gaining access, and a utilization rate that more than doubled year over year. Despite more healthcare providers offering in-person services during the third quarter, Teladoc reported an annualized utilization rate that was 0.5% higher than second-quarter figures.

While some investors were upset by the company's decision to merge with Livongo earlier this year, the combined business is already helping Teladoc win new clients. New client cross-selling that occurred before the company officially completed its acquisition of Livongo at the end of October led Teladoc to expect at least twice as many bookings in the fourth quarter as were reported in the third.

Livongo helps people manage chronic health conditions with the help of devices that track health signals and provide suggestions in real time. When Teladoc made its merger offer, Livongo's flagship diabetes service boasted around 410,000 members representing just a tiny fraction of the 34.2 million Americans with diabetes.

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