Analysts have recently dropped their Teladoc stock rating from hold to sell as they view over-exposure to consumer spending as a threat to plummeting Teladoc stocks. Teladoc was riding the telemedicine wave recently as more people sought remote alternatives to in-person healthcare.
However, recent pressures have seen Teladoc stocks drop by 90% from their all-time highs, 74% over the last year. These losses happened despite a 37% growth in revenue over the past year. Though tech stocks have fallen heavily in the first six months of 2022, few have fallen quite as hard as the Teladoc stocks. Still, Teladoc stocks may not yet have bottomed as organizations like Amwell, and One Medical put increasing pressure on revenues in the telehealth space.
Teladoc’s Growth & Decline
Teladoc was founded in 2002. It gave people remote access to state-licensed healthcare workers, a new concept at the time. Teladoc went public in 2015, launching primary, urgent, and mental health care through BetterHelp, its mental health services.
By 2020, after acquiring Livongo, Teladoc had become one of the world’s largest telehealth companies. Though Teladoc’s growth has continued unabated through 2020 and 2021, it has also reported substantial financial losses over the past two years, most notably the $6.6 billion resulting from Livongo goodwill losses as reported in its Q1 2022 financial statement.
Competitive Pressures Are Mounting
Increasing competition may be driving this loss of value. Recently several large competitors have been eying the market for telemedicine. These companies include:
- Amazon Care – negotiating a $4 billion acquisition deal with One Medical, a primary care provider in the telehealth space.
- Walmart Care Clinic – already has more than twenty healthcare divisions in its stores, including primary care.
- CVS Health Corp – once interested in One Medical, CVS is still eyeing the primary care sector and may be interested in acquiring Signify Health Inc.
- Amwell – has expanded its mental health services through acquisitions and strategic partnerships. It has agreements with Apple and Google Cloud. Google’s parent, Alphabet, invested $100 million in Amwell in 2021.
On July 21, 2022, Amazon and One Medical announced their merger agreement, creating a convenient and affordable primary care service that combines in-person and remote access to quality healthcare services. One Medical, a primary care service provider known as 1Life Healthcare, works on membership subscriptions. Theirs is a fast-growing business model. In 2021, One Medical had 736,000 members, expanding its membership by 34% in a year.
Teladoc’s future is unclear with formidable competitors such as Amazon Care, Walmart Care Clinic, CVS Health Corp, and Amwell.
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