Teladoc (TDOC 3.17%) shined during the worst of the pandemic -- and through the whole year of 2020. The telehealth company reported massive gains in revenue and online medical visits. And the shares advanced 138%.
But part of the story changed this year. Not the financial picture. Teladoc continued to post increases in revenue and visits. The company even revised its outlook higher. But the stock sank about 50%. Why? Investors worried patients would eventually abandon virtual medical visits and return to their local doctor's office. So far that hasn't happened. And clues show us it probably won't. So now, a few days before 2022, you might be wondering: Will Teladoc shares rebound next year? Let's take a look.
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Encouraging earnings reports
Teladoc's earnings reports this year have been encouraging. In the most recent quarter, for example, revenue soared 81% and patient visits climbed 37% to more than 3.9 million. Teladoc even increased its lowest estimate for annual revenue to $2.01 billion from the earlier estimate of $2 billion. The company reported progress in its aim to provide "whole person" healthcare. Teladoc is signing up more and more people for multiple programs. About 24% of chronic care members now are enrolled in more than one program -- that's up from 8% in the year-earlier period. The idea of whole person care also includes mental health -- an area that's also contributing to growth. And Teladoc says whole person care represents a $75 billion opportunity within the company's current client base.
Recent quarters and this year as a whole are indicators of what comes next for Teladoc. Here's why: The pandemic continues, but people have resumed their routines. And medical offices fully reopened quite a while back. Still, Teladoc's business continues to grow. Most recently, the National Labor Alliance of Health Care Coalitions -- the biggest alliance of labor unions -- said it will make Teladoc's full suite of offerings available to members. These members purchase health services for more than six million people.
And forecasts for the growth of telehealth look bright. About 60% of consumers say they would be interested in a virtual healthcare plan, according to Teladoc. The global telemedicine market may reach more than $431 billion by 2030, an Allied Market Research report shows. That represents a compound annual growth rate (CAGR) of nearly 26% from this year until that point.
$4 billion by 2024
Teladoc's growth rate may even surpass that of the industry. The company's target CAGR is 25% to 30% from now through 2024. This includes virtual medical care, mental healthcare, and chronic condition management. Teladoc offered some guidance for annual revenue in the years to come. The company aims for $2.6 billion in annual revenue next year. And the company is targeting $4 billion in revenue for 2024.
Teladoc estimates the U.S. total addressable market equals more than $261 billion. The company can increase revenue by gaining new members and by enrolling members in more and more programs. All of this means there is plenty of room for growth well into the future.
Considering all of these factors, Teladoc stock looks like a bargain right now. The shares are trading at about the same level in relation to sales as prior to the pandemic. But revenue back then was much lower than it is today.
TDOC PS Ratio data by YCharts
So, now let's get back to our question: Will Teladoc shares recover in 2022? If Teladoc continues along on its predicted path, recovery should be on the way. It's impossible to say for sure if investors will return to Teladoc shares in the new year or if it will take more time. But all of the elements are in place for Teladoc to reach its goals. And that could lead to stellar share performance over the long term.
