After shedding as much as 78% of its value since this time last year, shares of Teladoc Health (TDOC -0.71%) are finally showing signs of life. The telehealth specialist was labeled a "pandemic stock" with some investors completely discounting the future potential for the growth of telemedicine. This pessimism has weighed on the stock and Teladoc investors alike.
However, several recent developments suggest that the death of Teladoc Health has been greatly exaggerated and its future prospects could be much greater than some investors imagine. Given the ongoing list of positive developments, is Teladoc stock a buy?
More than a pandemic play
There's little question that the pandemic accelerated the adoption of telemedicine, but evidence suggests Teladoc Health, a leader in digital healthcare solutions, still has plenty of growth ahead.
Earlier this month a bipartisan bill was introduced to extend patient access to telemedicine services for Medicare recipients for an additional two years, while simultaneously seeking permanent approval. The Telehealth Extension and Evaluation Act would permit the Centers for Medicare & Medicaid Services to allow reimbursement for treatment for a wide array of telehealth services -- including substance abuse.
Just last week, Teladoc delivered fourth-quarter results that were far better than expected, with revenue of $554.2 million, up 45% year over year and a loss per share of $0.07. For context, analysts' consensus estimates were calling for revenue of $547.2 million and a loss per share of $0.57. Teladoc cleared both hurdles with ease. At the same time, cash flow from operations surged to $83.2 million, reversing cash burn of $114.9 million in the prior-year quarter.
Finally, Teladoc just announced a partnership with tech giant Amazon to provide voice-activated access to telehealth services via Amazon's Echo line of smart speakers. Teladoc users can say "Alexa, I want to talk to a doctor" and receive a call from a Teladoc provider, greatly increasing the ease of convenience for accessing telemedicine services.
At less than six times forward sales, Teladoc Health is selling at a significant discount compared to its price at the height of the pandemic. Add to that the large and growing list of catalysts, and it's clear Teladoc Health is a buy.