The early days of the pandemic offered Teladoc Health's (TDOC 4.58%) online medical visits and revenue a huge lift. People opted for sitting in front of a computer for a consultation instead of crowding into doctors' offices. Fast forward to right now. The great news is more momentum is on the horizon. Teladoc expects to increase revenue this year and over the long term.
Can Teladoc reach its goals? Well, things are looking positive. In the fourth quarter and the full year 2021, revenue and visits continued to climb. And the company is moving closer to profitability. But there are two numbers that stand out in particular. They are key steps along the path to long-term revenue goals. And that's why they are the most important numbers in Teladoc's latest earnings report. Let's check them out.
A look at forecasts
First, let's take a quick look at the company's forecasts. This year, Teladoc expects revenue to rise to the range of $2.55 billion to $2.65 billion. This means a 25% to 30% increase year over year. Teladoc also has set out longer-term expectations. The company aims for a 25% to 30% compound annual growth rate though 2024 -- and revenue of more than $4 billion by that time.
Teladoc plans to achieve that by increasing revenue per member by 25% annually -- and by increasing membership numbers by 1% to 5% each year.
The two most important numbers in Teladoc's report show progress in both of these areas. Revenue per member per month jumped 52% in the fourth quarter to $2.49. That's compared to the year-earlier period. And Teladoc U.S. members increased to 53.6 million. That's a 6.6% increase from the fourth quarter a year ago.
So Teladoc is showing that it can increase the number of members and revenue per member. But can this trend last? In a presentation last month, Teladoc said there is plenty of room for growth in both areas. For example, right now about 92 million Americans have access to a Teladoc product. And that's out of a total 298 million insured lives in the U.S. There's also a lot of potential for growth within current members. For instance, all current users don't yet have access to all Teladoc products. Only 35% of those 92 million individuals are able to choose Teladoc's mental health program at the moment.
And it's clear that Teladoc users are deciding to go for more and more products. More than 20% of chronic care members are enrolled in more than one program. That's up from less than 3% in 2019.
Reason to be optimistic
All of this means we have reason to be optimistic that Teladoc can indeed continue to grow both membership numbers and revenue per member. And that should result in Teladoc meeting its long-term goals.
Of course, Teladoc shares may not rebound overnight. They've lost more than 20% so far this year. Some investors still may want to see a few more quarters of growth -- especially as the pandemic shifts to an endemic situation -- before buying the stock. And others might want to see strong evidence of Teladoc beating out rivals for business before committing to the shares.
But for long-term investors, that's OK. In fact, declines offer opportunity to get in on this growth stock at a reasonable price. Right now, for example, the shares are trading well below Wall Street's average 12-month price forecast. And the stock is trading at only about 5.3 times sales. That's down from more than 20 a year ago.
Every investment carries some degree of risk. But Teladoc's progress toward its goals so far makes me optimistic about the company's future. And that's why I consider this healthcare stock a bargain at today's price.