Growth Stocks: Teladoc Inc.

Teladoc Health, Inc. (TDOC.US) is the world leader by size and number of clients for comprehensive virtual health care services. Its mission is to empower all people around the world to live healthier lives by transforming the healthcare experience. They want to position virtual care as the first contact consumers turn to to get the care they need and manage their health. Currently its clients are companies, where more than 50% belong to the Fortune 500 ranking, health plans, health systems and insurance and financial services companies (clients).

The digital transformation came during 2020, when Teladoc merged with Livongo, a leading company in digital solutions for chronic disease management for companies and health plans. For an amount of $ 13,938 million, divided into $ 401 million in cash, $ 555.4 million through conversion of Livongo Notes guaranteed by the Company and 60.4 million ordinary Teladoc shares valued at approximately 12,981.6 million of dollars. Also in 2020, they purchased InTouch, a leader in providing scalable, integrated virtual care solutions for hospitals, healthcare systems and other provider entities, for $ 1,069.8 million.

Teladoc currently provides business-to-business (B2B) virtual healthcare services to thousands of clients, health plans, hospitals and health systems, insurance companies and financial services (clients) spanning the global healthcare landscape and providing services to consumers directly and through channel partners. Through BetterHelp, they offer direct-to-consumer (D2C) service and trade partnerships with other trusted brands.

Revenue

Its source of income comes mainly from the fixed access fee by means of a recurring subscription by contract, by policy or by family unit. In some cases, Clients primarily pay monthly subscription fees based on a per participant and per month model, based on the number of active enrolled members on a monthly basis. They also generate income through providers and health systems related to their technological platform, mainly in the form of income from periodic access fees, as well as from the sale and lease of devices such as robots, carts and tablets.

Its revenue increased 98% to $ 1,094.0 million in 2020, including the $ 128.3 million increase from the InTouch Health acquisition and the Livongo merger. Excluding the impact of the InTouch and Livongo acquisitions, its revenue increased 75%, reflecting the acceleration in virtual care adoption stemming from the COVID-19 pandemic and the Company's broad drive to transform the experience of the medical care. In 2019, revenue increased 32% to $ 553.3 million, including a $ 33.2 million increase from the Advance Medical and MedecinDirect acquisitions during the year. At the end of 2020, 79%, 19% and 2% of our revenues were derived from subscription access fees, visit fees and others, respectively. For 2019, as for 2018, 84% and 16% of its revenue came from subscription access fees and visit fees.

In the quarterly data, its latest publication shows a substantial improvement in costs when compared to the previous quarter. However, when comparing with the same quarter of the previous year, costs have increased substantially, which in relative terms, the result was much worse.

source: Bloomberg

Growth strategies

Teladoc plans to enable consumer access to medical care on a massive scale, expanding the variety of clinical services to cover all unmet needs, increasing commitment to its current clients, improving and expanding access to services as well as the number of points of Contact.

It hopes to expand penetration among existing customers and leverage existing distribution channels and expand penetration in global markets. To continue in your growth process, one of the methods you want to use to grow is inorganically, through investments and acquisitions.

Sector and competition

Teladoc defines the competition in its earnings reports. Considering as such those companies that currently (or in the future) will develop and commercialize care technology (devices, software and systems) or currently (or in the future) provide virtual care services, such as the service of access to medical care and management and treatment of chronic diseases. The competition focuses, among other factors, on management experience, customer service, technology quality, know-how and reputation.

Technical situation of the chart

Teladoc, from its historical lows of $ 9 per share, has been developing a positive behavior within a channel until reaching its historical maximum of $ 311 per share last February. Affected by downward pressure on technology, it has recently lost channel support, for the first time in 5 years.

Teladoc Inc (TDOC.US) W1: source: xStation

The loss of support projects a retracement that could extend to $ 88.6 per share, coinciding with the previous relative maximum of September 2018. In addition, the RSI indicator shows us that only at its historical lows it was in the oversold zone (below 30), level that it could reach again with the current corrective movement that falls from the historical maximum to the lower projection, with the fall that Teladoc had in its early stock markets (yellow square), confirming the next level of support at $ 88.6 per share .

Darío García
XTB Spain