The Uber Of Healthcare

Jan. 08, 2019 1:28 PM ETTeladoc Health, Inc. (TDOC)CVS, MSFT, UBER, WBA38 Comments


  • Teladoc Health has recently weathered damaging controversies, including the departure of their CFO following alleged misconduct.
  • The company remains poised to capture a growing trend in online healthcare.
  • Revenues continue to grow at breakneck speeds, although their growth should decline as temporary gains from acquisitions subside.
  • Because the company has yet to demonstrate sustained earnings, may have low quality revenue growth, and faces regulatory hurdles, the stock remains a speculator's venture.

Source: Ithaca College Employee Benefits Homepage

Teladoc's Recent Turmoil

Teladoc (NYSE:TDOC) has recently found itself at the center of controversies that have weighed heavily on the stock. In addition, broader market weakness has done investors no favors. With shares down nearly 50% from their highs, is now the time to commit capital to this explosive stock in a nascent, rapidly growing industry?

Global telemedicine market size from 2015 to 2021 (in billions of USD)


How They Make Money

Teladoc generates its revenues primarily through a per-member-per-month, subscription based model; the services of which it offers to its clients (subscribers) who then include telemedicine as a part of their health package that they offer to their members, i.e. employees, card holders, beneficiaries, etc.

"The Company [Teladoc] generates virtual healthcare service revenue from contracts with clients who purchase access to the Company’s professional provider network or medical experts for their employees, dependents and other beneficiaries."

Additionally, Teladoc generates revenue through "visit fees" on a per-telehealth general medical and specialty visit basis, similar to what one would find in paying a co-pay when going to a traditional doctor.

"Subscription access fees are paid by our Clients on behalf of their employees, dependents, policy holders, card holders, beneficiaries or themselves, while general medical and other specialty visit fees are paid by either Clients or Members."

Lastly, in their most recent 10-Q, the company states, "We also generate revenue from Members of our direct-to-consumer behavioral health product on a subscription access fee basis."

Source: Teladoc's 3rd Quarter 10-Q

As for what constitutes services provided, the company writes in its latest 10-Q, "Revenues are recognized when the Company satisfies its performance obligation to stand ready to provide telehealth services which occurs when the Company’s clients and members have access to and obtain control

This article was written by

Louis Stevens profile picture
A community achieving financial freedom through visionary investing
I buy businesses I like, then hold them with a long term time horizon.

Some credentials of mine: Former U.S. Army Officer, BA Political Science, MBA University of Florida, inventor of the L.A. Stevens Valuation Model.

Disclosure: I am/we are long TDOC, MSFT. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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