Digital-medicine company Teladoc Health (NYSE:TDOC) has been one of the most high-profile healthcare companies of 2020. As a result, both buyers and sellers have furiously traded Teladoc stock, pushing the daily volumes to new highs this year.
In late October, Teladoc officially finalized its merger with applied health signals specialist Livongo Health. In theory, the combined company could provide digitized care spanning a patient’s entire health journey.
So, Livongo common stock has now ceased trading and Teladoc has emerged a bigger, more comprehensive company. On top of this potentially game-changing news, Teladoc also recently reported its third-quarter fiscal results.
Clearly, there’s a lot that prospective investors have to sort through here. Some traders are wondering whether they should have confidence in the company’s sustained growth. So, here are some things you should know in order to make an informed decision about TDOC.
The Lowdown on Teladoc Stock
With an average three month trading volume currently above 3.4 million shares, Teladoc stock is clearly a hot commodity. Even prior to the merger with Livongo, TDOC shares were an item of interest due to the onset of the novel coronavirus and the increased demand for remote healthcare.
Consequently, while some other stocks crashed hard in March, Teladoc held its head up high. Indeed, the share price started in March at around $125 and ended the month at $155.
What’s more, the uptrend in Teladoc stock persisted through early August, when the share price peaked at its 52-week high of exactly $253. However, uptrends generally don’t last forever and a pullback was inevitable.
As of Nov. 13, Teladoc stock is now trading at about $180. Therefore, prospective investors can own TDOC shares at a discount, considering its peak price. Now it’s just a question of whether the company is poised for growth in the wake of its recent, major acquisition.
A Worthy Purchase
When Teladoc purchased Livongo for $18.5 billion, heads turned in the financial community. After all, this was a pricey purchase and Teladoc stock holders had a right to know why it would choose to buy this company. To that end, Teladoc’s CEO Jason Gorevic offered a big-picture view of the value proposition provided by the merger:
“Both Teladoc Health and Livongo were founded with the same mission: to create a new kind of healthcare experience, one that empowers people everywhere to live their healthiest life. […] Together, our team will achieve the full promise of whole-person virtual care, leveraging our combined applied analytics, expert guidance and connected technology to deliver, enable and empower better health outcomes.”
In other words, Livongo is a perfect fit for Teladoc. The combined company can now provide practically end-to-end remote healthcare. It’s also worth noting that Livongo was expanding rapidly prior to the merger, with its sales “more than doubling sales every year.”
Raised Outlook
Of course, there’s more to consider than the new business combination. Shareholders need to know whether Teladoc is on solid financial footing.
Fortunately, the company’s third-quarter fiscal results indicate that Teladoc is faring well. In fact, the company’s quarterly total visits came to almost 2.84 million. This represents a tripled year-over-year (YOY) increase.
Not only that, but Teladoc’s third-quarter operating revenues of $289 million beat estimates and more than doubled YOY. Plus, the company’s revenues from access fees climbed YOY by a jaw-dropping 90% to nearly $227 million.
It shouldn’t be too surprising, then, that Teladoc changed its fiscal outlook for 2020. The company raised its full year revenue guidance to a range of $1.005 billion to $1.015 billion.
Bottom Line
Teladoc stock was hard to resist even before the Livongo merger. Today, though, it’s on an even higher level.
Needless to say, Teladoc is growing by leaps and bounds — blossoming into a full-spectrum digital medicine provider with outstanding financials. And with the Livongo acquisition now finalized, TDOC’s value proposition is greater than ever. Investors should consider jumping in.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system —with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation.