Is Teladoc Health a Buy on the Pullback?
Digital health was a struggling industry prior to the coronavirus pandemic, but COVID-19 changed the game, pushing consumers and providers alike toward digital health solutions. Unsurprisingly, leading player Teladoc Health (NYSE: TDOC) emerged as a key beneficiary of this explosive industrywide expansion, recording a record number of virtual care visits during the pandemic, and its shares are up 133% year-to-date (YTD).
While some have wondered whether these effects would be fleeting, the coronavirus does seem to have brought about a longer-lasting change in consumer behavior related to the adoption of digital health solutions. This was evident in Teladoc's stellar third-quarter performance, with the top line up 109% year over year (YOY) and total virtual care visits up 206%. The company also just completed its merger with Livongo Health, an $18.5 billion mega-deal creating a company that could become a one-stop shop for all virtual care needs.
However, the market reacted unfavorably to both these announcements. Teladoc's share price has fallen by almost 13% in the past month as political uncertainty and surging COVID-19 cases have dampened the market overall. It's ironic that a stay-at-home stock like Teladoc has become a victim of this marketwide malaise, but the pullback has presented a very attractive opportunity for retail investors to start a small position in Teladoc's otherwise pretty expensive stock.
Source Fool.com
