05-20-2019, 10:09 PM
Quote:At the forefront of this game-changing shift is Teladoc. The company connects patients to doctors for various healthcare concerns, from chronic conditions to the flu. It even provides second opinions from specialists via telehealth solutions. Last quarter, its virtual visits exceeded 1 million for the first time, growing 75% from one year ago. As a result, the company reported total revenue reached $129 million. Even if you x out visits and revenue growth from acquisitions, Teladoc reported organic visit and revenue growth of 29% and 23% in the past year, respectively.3 Top Growth Stocks to Buy Right Now
About 82% of its revenue comes from subscriber access fees paid by third parties, including insurers, health systems, and self-insured corporations. These clients pay a fixed amount so members can access virtual visits, because they're considerably cheaper than traditional in-office visits. For instance, a virtual visit is $472 less expensive than an in-office visit, according to Veracity Analytics, an independent healthcare data analytics company. The remaining 18% of Teladoc's revenue comes from per-visit fees.
Currently, Teladoc's solution is available to 27 million people through subscription access relationships, but that's only scratching the surface of this mega-opportunity. In addition to landing new accounts, management estimates that expanding existing relationships could provide access to another 50 million people. Additionally, over 20 million Medicare Advantage members could gain access to telehealth services as soon as 2020. Furthermore, the company's expanding into Europe, opening the door to a population over 500 million.
Despite the massive opportunity, Teladoc's share price has fallen following a short-seller report questioning a referral marketing program for its mental health business last year and the departure of its CFO over allegations of insider trading in December. The referral program, however, only represented about 5% of its new mental health members, and eventually a new CFO will be hired. Given the massive market opportunity and the robust top-line growth, the recent sell-off in shares could make this a great time to add this telehealth stock to growth portfolios.