Telemedicine pioneer Teladoc Health (TDOC 0.26%) had an incredible 2020. The pandemic turned the small but growing remote virtual care niche of the healthcare industry into a basic staple. But as the economy has begun to reopen, some shareholders have worried Teladoc's progress might suddenly reverse course. Helped by its transformational acquisition of Livongo Health last autumn, Teladoc has dispelled those fears with an outlook for revenue to nearly double again in 2021.

Amwell (AMWL -0.57%) on the other hand -- not so much. Its fourth-quarter 2020 results were decent enough, but the outlook for the new year implies the health technologist's expansion will slow to a snail's pace as it laps initial effects from the pandemic. Here's why it's best to practice patience before buying the dip in Amwell.

A doctor holding a stethoscope to an illustrated icon of a person

Image source: Getty Images.

A tale of two telemedicine firms

Teladoc and Amwell both operate in the virtual care space. Teladoc helped trailblaze the movement, offering patients access to healthcare professionals via phone or online video conference through their insurer and/or employer's healthcare plan. As a slew of upstarts have entered the fray offering similar access to care over phone or video, Teladoc's addition of Livongo to the mix will be a game changer. In addition to the services it helped bring to the mainstream, it now also offers remote health monitoring and coaching.  

The result? Management sees revenue increasing at least 79% year over year in 2021 to $1.95 billion to $2 billion. On a pro forma basis including Livongo results prior to the tie-up last autumn, full-year 2021 growth is expected to be at least 40%. Yes, it's a slowdown from the 98% rate posted for full-year 2020, but Teladoc is no slouch. As it laps the massive one-time bump it got during the economic lockdown last year, the company is still finding ways to grow at a rapid pace.

More recent industry entrant Amwell comes at telemedicine from a different angle. It primarily partners with healthcare providers themselves to equip them with the hardware and software they need to schedule visits and stay in touch with patients, and to help different providers efficiently communicate with each other regarding patients' needs. It had a pretty good outing in 2020 too, growing revenue 65% year over year to $245 million. Most impressive was the growth in active providers on the Amwell platform. It ended the year with about 72,000 compared to just 7,000 at the end of 2019.

But Amwell is a partner with healthcare providers and makes money based on usage, so the massive increase in professionals utilizing its systems isn't going to equate to the same increase in revenue. In fact, though there are tens of thousands of new healthcare providers on the Amwell platform, in-person visits are starting to make a comeback. As a result, utilization of Amwell is expected to take a hit in 2021. Where Teladoc is expecting another near-doubling in revenue in 2021, Amwell expects revenue to increase by just 6% to 10% to a range of $260 million to $270 million. Even worse, the company foresees generating an adjusted EBITDA loss of $147 million to $157 million in the next year.

A single lap in an endurance race

Amwell is clearly getting hit with some post-pandemic blues, and shares are getting hammered as a result. The stock price has been halved from its peak just a few months ago and is trading below its IPO price debut last September. And with it still a long ways off from breakeven (versus Teladoc, which anticipates generating an adjusted EBITDA profit of at least $255 million in 2021), I don't think Amwell is a great buy-the-dip candidate at the moment. Teladoc -- which is down almost 40% from its all-time high -- looks like the better buy to me right now. 

However, don't be quick to completely write off Amwell. With 72,000 healthcare providers and groups in its system, this remains a potential long-term growth story in the making. Remote care expansion might be taking a breather for many of these physicians and health professionals as they lap the lockdowns and forced virtual visits from a year ago, but there's no shortage of growth potential embedded in all of those relationships Amwell has struck as of late. While I'm not scooping up more Amwell stock (yet), it's certainly still on my watch list, since the healthcare industry is still experiencing rapid changes due to the COVID-19 crisis.