Telehealth isn't going anywhere just because routines have returned to normal and there aren't issues with people visiting doctors' offices again. Virtual visits give doctors and patients more flexibility and can make it easier to stay on top of chronic conditions like diabetes and hypertension. Teladoc Health's (TDOC -3.17%) share price has nosedived in the past few years, but the business itself has evolved and become much bigger than it was before the pandemic began. The company's success can be illustrated with just one impressive stat: its sharp increase in virtual visits.
The company's quarterly visits are now greater than its annual visits were in 2019
Teladoc hasn't been generating the sky-high growth numbers it was producing in the early stages of the pandemic, but its continued growth has made its business much bigger than it was before 2020. Here's a look at how many virtual visits the company logged going back to 2019:
Data source: Company filings. Chart by author.
There has been mammoth growth in virtual visits. And another way to highlight that is by focusing on that figure from 2019 -- 4.1 million virtual visits. Now take a look at the company's recent quarterly visits:
Data source: Company filings. Chart by author.
Teladoc is now reporting more quarterly visits than it previously recorded over a full year. And that's the new baseline for the business -- the new normal. Telehealth is an industry that's still growing, and these numbers are likely to continue rising. But despite all that growth, the healthcare stock remains deeply undervalued.
Teladoc's valuation is incredibly low
Teladoc's sales have also increased significantly over the years, with revenue in 2022 totaling $2.4 billion and equaling more than 4 times the $553 million in sales it reported in 2019. And yet, the stock is trading at a lower price than it was in 2018. Here's the stock's price-to-sales multiple, to help put the valuation into perspective:
TDOC PS Ratio data by YCharts
Is Teladoc Health a buy?
Last year, Teladoc's financials were muddied with impairment charges stemming from its 2020 acquisition of chronic care company Livongo, it paid $18.5 billion for the business. It admittedly overpaid for Livongo, at a time when many were overpaying for all sorts of investments. It was a mistake, but Teladoc's future looks promising, with telehealth offering patients an easier, more flexible healthcare option, particularly when it comes to staying on top of chronic conditions.
Teladoc is a growth stock that should perform better now that its financials are improving and impairment charges will likely no longer severely impact its bottom line. Although the business isn't profitable yet, Teladoc could get to breakeven in the future as it continues to build and expand its operations. For long-term investors, this is a stock you should consider picking up right now, because it may be overdue for a rally.
