If you missed buying shares of Teladoc Health (TDOC 7.03%) during its supernova of popularity last year, there's still quite a lot to be tempted by. With millions of people self-isolating last year to avoid infection by the coronavirus, Teladoc's telehealth platform was a lifeline that guaranteed access to a doctor even when it might have been too risky to go in-person. 

Now it has emerged as one of the market's leading providers of healthcare at a distance. But it's unclear whether it can ever do so profitably, and many of the forces that supported its meteoric rise to fame are now petering out. So, should investors still consider a purchase, or would it be better to look for a more-rapidly ascending star?

A doctor sits at her computer while taking notes with a pensive expression.

Image source: Getty Images.

Why it might be too late

If you believe that Teladoc is largely a pandemic stock whose moment of success is in the rearview mirror, it could be too late to buy. Using this logic, it makes perfect sense that the stock is around 32% lower today than it was one year ago, during the height of the pandemic in the U.S. Now that the country is largely reopened and there isn't much constraint on the in-person service capacity of hospitals and clinics, there isn't as much pressure for people to use telehealth solutions like the ones that the company offers. 

And it might even be the case that a large number of people like going to in-person doctor's visits. Compared to Q2 of 2020 where the company reported 1.44 million platform-enabled sessions, in the first three months of this year it only reported 1.09 million sessions. 

Then there's the issue of decelerating membership growth. Right now, the number of paid members is 51.5 million, compared to 50 million in the second quarter of 2020. That's barely any growth, at least not compared to the pace of 7 million new members onboarded during Q1 of 2020. For the year's total, management is expecting a maximum of 4% membership growth compared to 2020. 

In short, on the basis of membership and visit trends, new investors are unlikely to be buying a stock with a huge amount of forward momentum like they might have been if they bought it last year.

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There's still plenty of time

While it's true that Teladoc probably won't have another growth spurt as aggressive as last year's, rumors of its demise have been very much exaggerated. The thing that investors should focus on is the company's excellent financial performance, driven by a defensible and lucrative business model.

The first quarter showed that it's off to a great start, with revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) exploding year over year by 151% and 430%, respectively. That doesn't sound much like a business on the verge of declining, though it does show that the company might be making progress on its profitability issues.

What's more, management predicts that total revenue for 2021 will grow to reach at least $1.97 billion, representing an increase of 80% compared to 2020. Its adjusted EBITDA is also slated to double at a minimum, potentially totaling as much as $275 million for the year. Even if the actual financial results are a bit lower than these projections, the company will still be clocking extremely rapid growth during a year when many people might have expected a contraction.

To drive these massive gains, total visits are expected to grow by as much as 27%, even with the impact of reopening and a receding need to socially isolate. In other words, people want to use telehealth to access healthcare resources even when they aren't being forced to, and that's extremely good news for Teladoc shareholders. 

And, in light of its recent acquisition of the digital chronic care company Livongo Health, its array of services for members is increasing all the time. It's possible that growth won't slow until well into 2022, if consumers find the new product offerings to be compelling.

Still, some investors might be a bit skittish to purchase Teladoc on the basis of its expected future performance for the rest of the year. After all, projections are often wrong, and real data from financial filings is the most authoritative set of information. So keep an eye out for the company's second-quarter earnings report, which is scheduled for July 27.

If it looks like the company is on track to fulfill management's expectations, it'll be another data point supporting the idea that there's plenty of upside left for new investors. But a minor falling-short wouldn't necessarily mean that it's too late to buy the stock -- Teladoc is a stock worth holding for a long time, and an off quarter might not mean much.