Shares of Teladoc Health (NYSE:TDOC) have been absolutely pummeled this year. The telehealth specialist's shares traded at a 52-week low on Tuesday, as the company's 2021 sell-off worsened. Its $101 stock price at the time of this writing is down 67% from highs achieved earlier this year. Ouch!

But has the stock's sell-off finally gone too far, creating a buying opportunity for investors? Let's take a look at the underlying business and consider the company's long-term prospects to see if this may be a good time to buy this growth stock

A person hitting a buy button on a keyboard.

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Strong organic growth

Anyone taking a look at Teladoc stock should first take a moment to pick apart the company's organic growth from its reported growth. Because of Teladoc's Oct. 30, 2020 acquisition of Livongo Health, it's very difficult for investors to gauge how quickly the business is growing organically.

Fortunately, management breaks out organic revenue growth during the company's earnings calls. In Teladoc's third-quarter earnings call, management said its revenue increased 32% year over on an organic basis (excluding acquisitions completed over the past 12 months). That's actually quite impressive considering the wildly tough comparison Teladoc is up against: 90% organic revenue growth in the year-ago quarter. 

Evidence of a scalable business model

Of course, strong top-line growth isn't enough to make a growth stock a good long-term buy. Investors should also look for evidence of a scalable business model. Without a scalable business model, Teladoc's losses today would never convert to profits, as expenses would grow just as fast as revenue.

Fortunately, the scalability of Teladoc's business model is clear by looking at how much faster adjusted gross profit is growing than revenue. Teladoc's fiscal third-quarter revenue grew 81% year over year yet its adjusted gross profit increased 91%. These two metrics, of course, have been driven by a significant expansion of Teladoc's adjusted and unadjusted gross profit margins over these periods.

The future

Last month, Teladoc shared some compelling insight into the company's long-term potential at its Investor Day presentation. For instance, management noted that a Piper Sandler survey recently found that 82% of consumers believe telehealth is equal to or better than in-person healthcare. This is a massive opportunity that's largely untapped. Teladoc's estimated fiscal 2021 revenue of $2 billion accounts for less than $1% of the $261 billion serviceable addressable market in the U.S. that management believes Teladoc is vying for. Further, total annual telehealth market revenue in the U.S. is estimated to be just $5.5 billion -- a fraction of Teladoc's $261 billion addressable market.

Of course, the market will likely only get bigger with time. Fortune Business Insights estimates the global telehealth market will reach $636 billion by 2028.

With such a massive market opportunity, it's not surprising that the company believes its revenue can grow at an average annualized rate of 25% to 30% between now and fiscal 2024. This would put fiscal 2024 revenue at more than $4 billion -- about double the revenue that management expects this fiscal year. Yet even at $4 billion in revenue, the green shoots would still be ahead for the company.

So is Teladoc stock a buy now that its shares have cratered? At a $16 billion market capitalization, this long-term opportunity is starting to look extremely attractive. There will be volatility for sure. But with 25%-30% organic growth expected over the next four years, and given the massive size of Teladoc's market opportunity, brave investors may want to consider taking a stake in this company while shares are down. Of course, the stake should only represent a small portion of an investor's overall portfolio, as there are no guarantees in investing. But shares do look compelling today.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.