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Teladoc: Telehealth To The Flu Rescue


  • Teladoc saw a big boost in virtual visits from the flu epidemic in the U.S.
  • The company has significant opportunities to grow the total addressable market including higher utilization rates.
  • The stock is reasonable priced at 5x forward sales estimates.

While numerous biotechs work to find the next vaccine for the flu epidemic that wreaked havoc on the U.S. this Winter, Teladoc (NYSE:TDOC) offers a digital solution that helps prevent the spread of the illness and allow patients to easily get the needed medical care. The stock isn't cheap, but the best play in telehealth is a proven company now.

Source: Teladoc website

Attractive Model

The company has an attractive subscription model and a developing model that charges per visit. The subscription model generates revenue per user, per month. Other healthcare providers are going for paying fees per visit. Either way, Teladoc has an attractive model of recurring revenues with tons of room for expansion.

The company is growing the subscription revenue per user having reached $0.95 per month, up from only $0.59 last Q4. Utilization rates ended Q4 at only 8.1% leaving plenty of room to bring in new patients from existing customers. The flu season caused a spike in January visits to 8,000 a day with 20% of visitors due to flu related symptoms. The ability to handle the spike in customers proves out the scalability of the platform and helped reduce patients from going to over loaded doctor's offices and exposing other people to the flu.

Due in part to the new business Blue Cross Blue Shield over 50% of visits are related to new customers. The key to the virtual health business is to get customers acquainted to new technologies before mass adoption can occur. Teladoc made a ton of progress on that front over the last few months due in part to offering a better solution than doctor visits for the flu epidemic.

With the inclusion of Best Doctors now, the virtual health concept goes far beyond the convenience to the patient and reduction in infected patients exposing other

ChartTDOC Revenue Estimates for Current Fiscal Year data by YCharts

This article was written by

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Stone Fox Capital Advisors, LLC is a registered investment advisor founded in 2010. Mark Holder graduated from the University of Tulsa with a double major in accounting & finance. Mark has his Series 65 and is also a CPA.

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