Down 70% over the past year, Teladoc (TDOC -3.21%) now trades at 3.9 times sales, while Johnson & Johnson (JNJ -1.32%), a much slower-growing company, trades at 4.9 times sales. Investors are not valuing Teladoc as high as it should be based on its fundamental strength in a few key areas.
First, Teladoc has a product consumers love. The company retains almost all of its customers each year and actually generated 52% more revenue per user in 2021.
Teladoc continues to add offerings in fast-growing industries like diabetes monitoring and mental health services. This helps the company expand into a mostly untapped market in which only 25% of Americans used a virtual healthcare service in 2020, the first year of the pandemic.
Although investors worry about Amazon's (AMZN -2.44%) Amazon Care taking over telehealth, the e-commerce giant does not appear to have the ability to conquer all markets with ease. For example, Amazon bought Whole Foods in 2017, but today it only makes up a tiny portion of the grocery market in the U.S.
Watch the video below to see the full analysis.
*Stock prices used were the midday prices of March 15, 2022. The video was published on March 15, 2022.
