Can Teladoc Win in a Post-Pandemic World?

When the COVID-19 pandemic started, demand for the services of telemedicine platform provider Teladoc (TDOC 3.31%) surged, turning its stock into one of 2020's biggest winners. However, with people around the world gradually getting back to their pre-pandemic behaviors, can this company continue to grow? In this Fool Live video clip, recorded on Jan. 27, Fool.com contributors Travis Hoium, Rick Munarriz, and Matt Frankel give their thoughts on the future of this healthcare industry disruptor. 

Rick Munarriz: The model obviously makes sense from the perspective that we don't want to spend hours in a waiting room -- not just in the pandemic, because Teladoc was growing well before the pandemic. But again, Teladoc is one of the stocks -- and there's about four, five, six of them that I could just think off the top of my head -- that are companies that are much better now than they were before the pandemic because of the pandemic accelerating growth, but the stocks are trading for less than they were before the pandemic became a problem. Teladoc is one of those.

Teladoc, what I find really interesting about this is, last year, when the stock was doing well, they bought a company called Livongo Health. It's a different model. It's not a matter of virtual rooms. This is a matter of weight-loss management; diabetes is their big thing, where, basically, when you take a glucose meter, you take your blood reading, your trigger level, if it goes high, they immediately just text you and they start consulting you. It's like the nagging mom. Except it is actually in your phone, and they can actually counsel you one on one. It doesn't have to be like little robot prompts to get you back to where you are, and it's been proven to work.

It's just like everything else that has been proven to get you on the straight and narrow, and a lot of companies have hopped onto the Livongo platform because they go, "We want healthy employees. It's fine, we accept we're going to have diabetics here. Let's try to control their blood sugar so they are more productive and don't wind up being health risks for their lives, much less for our company."

The only reason I'm bringing up Livongo is, right now, all of Teladoc is worth less than what they paid for Livongo, just one acquisition, last year.

Again, clearly, they overpaid for Livongo by most measuring sticks, but I think Teladoc is the company that ... it's not perfect. The thesis two years ago, it seemed like there was no competitor. Now there is, and a lot of high-tech companies are saying, "I want in on that, because how easy is it to just set up virtual doctors, get a network of doctors all around the world." And telehealth, telemedicine, it's a competitive market right now.

More competitive than it was a year ago. But the visits -- it's still posting healthy year-over-year growth, even now, when it's safe to go see a dermatologist, it's safe to go see a psychiatrist or a psychologist, it's safe to see a weight-loss management consultant. All these different specialists that you can find right on Teladoc and pay either nothing or $5, $10, depending on your insurance plan. I think it's a very dynamic platform, and Teladoc, despite the competitive climate, I think is going to continue to be a leader. So I really like Teladoc, and especially like it at today's prices.

Travis Hoium: This is one of those companies that ... you forget how long it takes to disrupt anything in the healthcare industry. This is an insanely slow-moving industry. If a company is growing the way that Teladoc is, I think that's a really positive sign. The other thing is, they are the disruptor, not the disruptee. So you talked about competitors getting into the market. UnitedHealth Group (UNH -1.03%) is just down the road from me here. That's a company where you think about their business model -- are they going to completely disrupt their business model to go to a lower-margin business, potentially, or at least lower opportunity from an overall standpoint?

I question who is going to be able to go into that space and really be competitive. I'm not saying there isn't going to be competitors, but some of the companies that are spinning up offerings are maybe not the ones that are going to be the disruptor. I like what you said there. Matt, you have some thoughts?

Matt Frankel: Where I struggle on Teladoc, and maybe where I can put my mind at ease on this: When I think of these pandemic plays, there's two ends of the spectrum. There's companies that provided a temporary solution to pandemic disruption. Think Peloton (PTON 2.62%) -- something that we're seeing now was just a temporary solution. Then there's companies that took something that was a bad process, pandemic or not, and made it better, like, say, DocuSign (DOCU 1.56%). I have to think Teladoc falls somewhere in the middle there. Some people are going to go back to doctors. You're not going to see the stickiness that we had in 2020 in that business, but where on that spectrum do you think Teladoc lies?

Munarriz: It's not DocuSign that it's a complete 100% replacement, better than the original in every sense. But again, when you think Teladoc, and you think telehealth in general, they can do a lot of things that you normally wouldn't expect. There's now USB [thermometers] so they can take your temperature remotely.

Obviously, there's stuff like -- a dermatologist can actually look at you. They won't be able to get a biopsy. You have to do that in person. Stuff like lab tests. You need a doctor. You're not going to get a proctologist checking you out through Teladoc. That's not going to happen. You have to go in person, and I get that. But I think there's plenty of opportunities within primary care -- especially when I have a cough or I think someone's coming down with something where they have a fever. Simple stuff that you would actually either get up and go to one of the minute-clinic/urgent-care places or to an actual doctor. That is no longer necessary.

Those basic things that are just basically non-invasive, which is what Teladoc can do really well. Stuff like psychiatry and psychology and all these therapies and stuff like that. There's a lot of stuff that they can disrupt, and they're already doing that. But again, the company was going well before that, but yes, it's not a complete substitute. Again, I own REITs (thanks to you, Matt) that own medical buildings and hospitals and stuff like that. I don't want them to go out of work either, and I don't think they will.

But Teladoc, there's a part of the market that I think is very important -- 24-hour, around-the-clock, that they will find a doctor for you at the other end of the world to help you if it's 3 a.m. and you have a condition where you really wouldn't be able to get it from a doctor unless you're going to like an emergency room or an urgent-care clinic that's open 24 hours. Definitely I think it's a business model that is unappreciated. But yes, it's not a perfect disruptor, but they will never disrupt everything.