Teladoc Health (TDOC -4.67%) is a virtual health pioneer. The company provides internet access to healthcare professionals 24/7 for patients around the world. In 2020 the doctors in the Teladoc system will provide over 10 million virtual consultations to their patients.

Not surprisingly, the demand for the company's services has dramatically increased in 2020, the year of COVID-19. Because of the health scare and worldwide lockdown, more and more people are turning to internet doctors to provide their healthcare needs. Here's how shares of Teladoc Health have performed since January. 

Idea bubbles with various healthcare diagrams and iPod devices.

Image source: Getty Images

Q1 -- the stock took off

On January 2, shares of Teladoc traded at $84. Investors who bought at that price could get 119 shares for $10,000. At the time, the company's market cap was about $6 billion. While the stock market crashed in the first quarter, Teladoc's stock went in the opposite direction. By the end of March, the stock jumped to $160 a share, almost doubling in three months.

Revenue also grew fast, but not that fast. The company reported $181 million in revenue for the quarter, up 41% from a year ago. What drove the stock higher was an anticipation that the COVID-19 lockdown would accelerate visits dramatically. On its conference call, Teladoc raised its revenue guidance for 2020 to $800 million, up $100 million from the previous forecast.

Many doctors' offices started to close down late in the quarter, and the company's virtual doctor visits hit the 2 million mark for the first time. That's a dramatic increase, up 90% from the year-ago quarter. During the health scare, Teladoc saw record numbers of patient visits. And during the market crash, the stock was a safe haven for investors.

Teladoc Quarter Quarterly Revenues Revenue Growth (y-o-y)
Q1 (January to March) $181 million 41%
Q2 (April to June) $241 million 85%
Q3 (July to September) $289 million 109%

Numbers from Teladoc Health; y-o-y = year-over-year.

Q2 -- the stock climbed some more

The second quarter of the year (April to June) validated the market's optimism. Teladoc's revenue jumped to $241 million for the quarter, up 85% from a year ago, and the company raised its guidance again -- now it was expecting over $980 million in revenue for the year. CEO Jason Gorevic said, "The pandemic has accelerated the widespread adoption of virtual care, and I'm confident there's no going back."

Growth in patient visits accelerated as well. The company reported 2.8 million virtual doctor consultations for the quarter, up 200% from a year ago. Gorevic tried to put a number on how much of this growth was due to the shutdown: "(W)e experienced a sharp acceleration of visit volumes during March and into the month of April as comprehensive shelter orders began, $0 co-pays were implemented, and brick-and-mortar facilities were closed." 

This dramatic growth decelerated as many doctors' offices started reopening. In late May and June Teladoc saw visit volumes grow only about 40% from a year ago. Perhaps because of this trend, Gorevic gave preliminary guidance of 30% to 40% revenue growth for 2021. The stock price continued to climb, passing $200 a share in June.

TDOC Chart

TDOC data by YCharts

Q3 -- Teladoc announced a surprise merger

In the third quarter, Teladoc reported revenue of $289 million, and raised estimates for 2020 yet again. The company now projects over $1 billion in sales for 2020. But this positive news was overshadowed by a big announcement: Teladoc was merging its business with another big name in virtual medicine, Livongo Health (LVGO).    

While the company was optimistic about this union, at first the market reacted negatively. One big reason for this pessimism was that Teladoc and Livongo are in different verticals. Teladoc provides a virtual doctor's office where patients can visit with a doctor over the internet, regardless of time or place. Livongo provides virtual coaching and tips to patients who are managing diabetes and other health issues. 

Yet many people see synergies in this merger. Will the doctors in Teladoc's network "prescribe" Livongo to their patients with diabetes? It will take a quarter or two (or more) to see how this merger plays out.  

Overall, 2020 was a great year for Teladoc shareholders

If you invested $10,000 in Teladoc in January, your 119 shares would be worth $23,364 by December 20. That makes a very nice gain of 133% for the year. Much of this outperformance was due to the COVID-19 lockdown. As more and more people are vaccinated in 2021, Teladoc's impressive revenue growth will no doubt slow next year.

On the positive side, the market has already priced this in. The stock has been "dead money" in the second half of the year, with all of the amazing gains happening in the first half. As a consequence, while the stock is not actually cheap at 17 times revenue, it's attractively priced considering the 109% growth rate in the most recent quarter. Investors who are bullish on Teladoc's future might be happy to buy at these prices.