Teladoc Health, Inc. (TDOC) stock prices were up by 0.25% as of the market closing on June 2nd, 2021, bringing the price per share up to USD$152.74 at the end of the trading day. Subsequent pre-market fluctuations saw the stock creep up by another 0.89%, bringing it up to USD$154.10.
Telehealth Booms During Pandemic
With the onset of the global coronavirus pandemic having triggered growth in various industries, healthcare and telehealth were some of the frontrunners. The global telehealth industry has been indicated by research as having been worth USD$61.4 billion in the fiscal year 2019. This number is expected to grow at a CAGR of 25.2%, bringing the market size up to USD$559.5 billion in the fiscal year 2027.
The company reported USD$1.094 billion in revenues for the fiscal year 2020, representing a 985 year-over-year increase as compared to the prior fiscal year. The first quarter of the fiscal year 2021 has seen TDOC report USD$453.7 million, representing a 151% increase from the revenue reported for the same time period of the year prior.
Guidance for revenues anticipated for the full fiscal year 2021 have a mid-range of USD$1.995 billion, implying a growth of 82% on a year-over-year basis. The company has instilled confidence in its robust growth trajectory, with reports of average annual revenue growth through to the full fiscal year 2023 being pegged at 30% to 40%. TDOC forecasts its top-line growth to remain strong over the next several years, in light of the expected expansion of the telemedicine space.
Also promising are the company’s membership rates, with paid memberships in the fiscal year 2020 being reported at 51.8 million, up from the 12.1 million paid memberships reported for the fiscal year 2016. 2021 has seen the company forecast paid memberships falling in the range of 52 to 54 million users. Given that 80% of the company’s revenue is generated from paid subscriptions, its 90% subscriber retention rate is a clear indicator of revenue visibility.
Another crucial consideration is the extent of the company’s rate of acquisitions, with the space between 2017 and 2020 having seen the acquisition of five companies by TDOC. These acquired companies were plucked from related industries, such as the medical consultation firm Best Doctors. These acquisitions served to facilitate the extension of TDOC’s reach into various foreign markets, including, but not limited to, Canada, France, and Latin America.
Future Outlook for TDOC
Armed with a solid liquidity position of USD$720 million as of March 2021, TDOC is poised to capitalize on the growth opportunities presented to it in the midst of the global covid-19 pandemic. The company is keen to continue its trajectory of success well into the post-pandemic economy. Current and potential investors are hopeful that management will leverage the resources at their disposal to facilitate significant and sustained increases in shareholder value.