TDOC

What is Teladoc Health (TDOC) and what do they do?

When you're sick these days, there's a new way to tell a doc.

Teladoc Health, Inc. is a virtual healthcare platform that provides telemedicine services in the United States. Intent on transforming the healthcare experience, the company gives clients a way to avoid long wait times in surgeries and clinics and receive medical expertise wherever they may be.

In their own words: “We aim to achieve our vision of making virtual care the first step on any healthcare journey by delivering, enabling and empowering integrated whole person virtual care services and experiences that span every stage of the healthcare journey.”

Founded in 2002 and headquartered in Purchase, New York, Teladoc Health offers a wide scope of client services and solutions. They cover everything from non-urgent, episodic needs such as the flu, all the way through to chronic, complex medical conditions including cancer, kidney disease, diabetes, hypertension and congestive heart failure.

How does Teladoc Health generate revenue?

The large majority of Teladoc Health’s revenue comes from monthly or yearly client subscriptions. The company categorises this subscription revenue as “access fees.”

Revenue also comes from per-telehealth visits; flat sums paid for individual appointments. Teladoc Health categorises this revenue as “visit fees.”

For FY2021 alone, 85% of the company’s revenue came from access fees while 13% came from visit fees.

Teladoc Health also earns revenue from recurring health system and provider access fees, as well as the sale and lease of medical robots, medical carts and digital tablets.

Is Teladoc Health profitable?

While revenue has grown steadily since Teladoc Health went public in 2015, the company has never made a profit. 

In fact, operating income recently sank deeper into red territory at minus US$74m, minus US$418m and minus US$239m in FY2019, FY2020 and FY2021 respectively.

What type of stock is TDOC? 

TDOC is a healthcare technology stock.

Who are Teladoc Health’s competitors?

While Teladoc Health is the industry’s current leader, competition in the telemedicine space is growing quickly.

Some of Teladoc Health’s competitors include Doximity (DOCS), GoodRX (GDRX), American Well (AMWL), 1Life Healthcare Inc. (ONEM), Doctor on Demand, MDLIVE and Sharecare (SHCR).

What happened between Teladoc Health (TDOC) and Livongo (LVGO)?

On 30 October 2020, Teladoc Health acquired Livongo, another digital health management firm, for US$18.5b cash and stock.

Under the terms of the acquisition, Livongo shareholders received 0.5920 shares of TDOC as well as US$4.24 for each Livongo share held.

Additionally, Livongo shareholders were also paid a special dividend of US$7.09.

Is TDOC stock a buy?

Teladoc Health has been unprofitable since going public in 2015 and yet the number of available shares continues to grow, diluting the stock’s value. Just between FY2020 and FY2021 the number of available shares rose from 91m to 157m.

Since its February 2021 high of over US$290, the TDOC stock price has dropped almost 80% down to the mid US$50 range.

Some investors believe that TDOC stock’s best days are behind us as the company’s competition is growing quickly. Other investors remain optimistic, focusing on revenue growth and future earnings potential gained by the Livongo acquisition.