Better Buy: Teladoc vs. Amwell
Telehealth companies Teladoc (NYSE: TDOC) and American Well (Amwell) (NYSE: AMWL) have seen their share prices soar this year, thanks to pandemic-related restrictions that have spurred consumers to use virtual care platforms for their medical needs. Teladoc's stock price is up more than 115% year to date while Amwell, which had its initial public offering (IPO) in September, is up more than 10%.
The stocks for both companies may have overheated, however. Neither is turning a profit yet, and upon news this week about Pfizer's (NYSE: PFE) successful trials regarding its COVID-19 vaccine candidate, the chances that next year will be better than this year for telehealth are narrowing. One of the driving factors for telehealth was that patients were concerned about the safety of visiting a doctor's office or hospital. Once those fears decline, many will go back to in-person visits.
However, that doesn't mean telehealth is totally going away. The pandemic has accelerated the growth of telemedicine, and its cost savings and convenience are winning over many companies and individual users. A recent study by Fortune Business Insights estimates telehealth revenues of $559.5 billion by 2027, with a compound annual growth rate (CAGR) of 25.2% over the next seven years.
Source Fool.com
