Teladoc Health (TDOC 0.05%) offers virtual healthcare services in the United States and internationally, with primary and specialty care telehealth solutions along with chronic care and mental healthcare.
The pandemic boosted the virtual telehealth business sky-high, increasing Teladoc stock from $83 at the start of 2020 to around $300 in mid-2021, driven by a rise in demand for telehealth services. Investors worry that customers might not need telehealth services anymore now that lockdowns have eased, which is affecting Teladoc's stock price. However, its future prospects make this stock a solid bargain to buy now.
Teladoc will report its first-quarter results on April 27. Let's take a look at whether Teladoc could manage another good quarter and what makes it a great buy today.
Will this be another strong quarter for Teladoc?
Investors are taking a second look at many stocks that received a pandemic-induced boost. We're witnessing that hesitancy in the current pullback of growth stocks. But it appears that the telehealth trend is here to stay. Forbes reported that a recent global survey showed around 63% of respondents who have used telehealth services in the past agreed to use it again post-pandemic. Teladoc has a first-mover advantage in this field and is poised for a rosy future.
Beyond that, the telehealth company boasts excellent financial performance. In 2021, Teladoc's total revenue jumped 86% year over year (YOY) to reach $2 billion. Visits on its platform surged 38% to reach 15.4 million. Though not yet profitable, Teladoc managed to reduce its net loss per share from $5.36 in 2020 to $2.73 in 2021. The company's cash flow from operations also came in at $193 million compared to a negative $53 million in 2020.
This consistently improving performance implies that Teladoc is on the right path to success. For comparison, Teladoc's peer, American Well (AMWL -2.46%), which had 5.8 million total visits last year, generated $253 million in total revenue in 2021, a mere 3% YOY increase.
On track to achieve profitability
According to guidance released in February, Teladoc expects total visits on its platform to be between $4.3 million and $4.5 million in the first quarter, with revenue in the range of $565 million to $571 million. Teladoc also expects net loss to come down to between $0.60 and $0.50 per share, compared to $1.31 per share in the same period last year. This could be quite an improvement as narrowing losses are a good sign for the company.
Wall Street's expectations are in line with the company's guidance. Analysts expect total revenue to be around $569 million, with a net loss of $0.57 per share in the quarter.
Teladoc appears poised to hit these goalposts, especially in light of new partnerships and virtual care offerings that are likely to boost the company's brand recognition and reach. In February, Teladoc teamed up with Amazon (AMZN 0.37%) to launch a "voice-activated general medical virtual care on supported Echo devices." This service will be mostly for general medical needs. This collaboration could prove very beneficial to Teladoc in the coming years.
Also, Teladoc recently launched Chronic Care Complete, a solution that will provide personalized support to patients with multiple chronic conditions. This offering could be a hit among the aging population, who might hesitate to visit hospitals, especially in the time of coronavirus.
A bargain stock poised to bring in fruitful returns
A smart way to earn investment money is to buy a growth stock with excellent financials at a discount and hold it for the long haul. Virtual telehealth services provide patients a more enjoyable medical experience that saves time and money -- which is why I believe the business will not fade away even in the post-pandemic era.
Analysts have high hopes for the stock, expecting it to jump 63% in the next 12 months, which I believe is possible. The stock is down close to 66% below its 52-week high of $192.11, making it the right time to grab this healthcare stock.