Please ensure Javascript is enabled for purposes of website accessibility

The Total Addressable Market for Telehealth Is Massive

By Brian Withers – Oct 2, 2021 at 8:45AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

But how, exactly, is the market of the entire telehealth industry calculated?

Teladoc Health (TDOC -7.26%) claims it has a massive $121 billion combined total addressable market in the telehealth space. But how did it get that number?

In this video from "Beat & Raise" on Motley Fool Live, recorded on Sept. 23, Fool.com contributor Brian Withers answers a viewer question by breaking down Teladoc's TAM calculations and shares the things he looks for when evaluating the metric. 

10 stocks we like better than Teladoc Health
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

They just revealed what they believe are the ten best stocks for investors to buy right now... and Teladoc Health wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

 

*Stock Advisor returns as of September 17, 2021

 

 

Brian Withers: Charles was asking about the total addressable market. I'll share the slide again. He says, "What makes up the $121 billion in TAM? It seems mystical."

I think you're absolutely right. TAM is very much as an investor, I'd take it with a grain of salt. Really, what they're doing here, I'll just take one of this. Expert medicine here, they went and found a source that says there's 5.1 million annual incidences and it's about $5,500 per each case. You multiply that together and you get $28 billion. Behavioral visits, 216 million annual visits, their estimate of how many of these can be treatable. I like how they put the math down here. But it does give you some, wow, these are just wild guesses. The thing that I look at for a TAM is a couple of things. One is the company, it has a reasonable base of reality and where they're coming from and they're focused on increasing their TAM into adjacent markets. Teladoc has absolutely done that with its acquisitions and things that it's trying to pick up.

Brian Withers owns shares of Teladoc Health. The Motley Fool owns shares of and recommends Teladoc Health. The Motley Fool has a disclosure policy.

Stocks Mentioned

Teladoc Health Stock Quote
Teladoc Health
TDOC
$27.08 (-7.26%) $-2.12

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.