What's In Store For Teladoc In 2019, After A Strong 2018?

Telehealth leader, Teladoc Health, Inc. (NYSE:TDOC) is poised for good growth in 2019 after making a strong finish to the year 2018.

The company by virtue of its expansive virtual care delivery solution is poised to grow in the rapidly growing telehealth industry.

Teladoc is fast gaining ground in the rapidly growing telehealth services industry in the United States with ample scope for flourish owing to concerning health care cost following inefficient care, duplication of services, significant waste and extreme variation in access, cost and quality of care.

Teladoc has the capability to address this inefficiency by providing superior quality of care through platform that caters to consumer demand and physician availability in real-time and in various modalities such as video, web, mobile and telephone. Moreover, the emergence of technology via big data and analytics, cloud-based solutions, online video and mobile applications offers the company with huge opportunity for growth.

Teladoc’s strategy to complement its organic growth with inorganic means is commendable. The acquisitions of HealthiestYou, Best Doctors, Advance Medical have increased the breadth of its business. The latest acquisition of Advance Medical has given it a global exposure, which should enable it to harness the international markets.

A report by Medgadget says that Global Telehealth Market is expected to witness a healthy CAGR of 29.8% by 2023. Teladoc is one of the few companies that should gain from the global demand for telehealth given its acquisition of Advance Medical which has expanded the company’s business in Latin America and Asia. Advance Medical allows Teladoc to deliver care in 125 countries in more than 120 languages.

The Infrastructural support from the recent acquisitions of Advance Medical and Best Doctors enabled the company to form a virtual care service called Teladoc Global Care, which will be effective beginning 2019. This new platform should expand the company’s business, which was until now restricted within the United States.

We expect a huge the company’s Global Care platform to attract huge traction as employers and insurers demand international services for telehealth, due to the growing number of expatriates.

We thus expect the company’s revenues, (which witnessed a CAGR of 82% from 2013-2017 and further growth by 89% in the first nine months of 2018) to be aided by increased business from international operations, while its U.S. business is already doing well.

Teladoc, carrying a Zacks Rank #3 (Hold), has gained 39% year to date, compared with the industry’s growth of 9%. The company’s strong growth should keep the rally in the shares alive going forward.

Some better-ranked stocks in the same space are BioTelemetry, Inc. (NASDAQ:BEAT) , Medpace Holdings, Inc. (NASDAQ:MEDP) and AMN Healthcare Servcies Inc. (NYSE:AMN) . While BioTelemetry carries a Zacks Rank #1 (Strong Buy), the other two carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

BioTelemetry, beat estimates in each of the four quarters with an average positive surprise of 55.6%. Medpace and AMN Healthcare beat estimates in three of the last four reported quarters with an average positive surprise of 22.8%, 23.97% and 4.17%, respectively.

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