Disclaimer: I’m new to the board and to breaking down a stock to see if it’s a worth-while investment. I’d love any and all feedback.
I recently stumbled upon Teladoc (TDOC) and from a first glance the increasing revenue stream looks enticing.
Company write-up: Teladoc Inc is a telehealth platform that delivers 24-hour, on-demand healthcare via mobile devices, the Internet, video, and phone. Its platform connects members with a network of physicians and behavioral health professionals. The firm receives the majority of its revenue on a per-member-per-month basis from subscription access fees. The remainder of revenue comes from visit fees. Teledoc partners with employers, health plans, and health systems to offer its solutions to their members. Teledoc’s platform matches members to healthcare providers in real time and is customizable for members, clients, and providers.
While they have not been profitable yet, their revenue and FCF is increasing, and the US Budget just signed into law expands access to telemedicine for 19 million Medicare Advantage enrollees which should provide a nice boost.
My concern/question for those from whom I’m learning: Is the current negative FCF and decreasing Net Income reason to dissuade investment?
TDOC is an interesting stock. It has been discussed here and owned by some prominent posters here. If you do a search, you should be able to find some of these discussions. Personally, I’m skeptical about TDOC. I’m in medicine and I find it hard to see any moat or lasting competitive advantage. And medicine can be very unpredictable due to ever changing government interventions. There’s also skepticism regarding their acquisition of Best Doctors. So I’m staying on the sidelines and sticking with other stocks I have more confidence in.
I don’t have a ton more to add here, outside of my Fortune 500 employer uses them. I have not yet, but talked to a colleague that did and seemed easy enough. I plan on using them for a couple basic things to avoid the dr office bill hitting my deductible. So I get the value.
It has been on my watchlist for a while.
Somewhat recently, they bought Best Doctors, and there was concern at the time if that business was going to slow their overall growth. That may be an area to research a bit more: what does Best Doctors bring to the table?
Amazon was rumored to be looking into something similar…so there is a concern of Amazon killing it like they did Blue Apron. However, I can’t imagine only 1 teladoc-type service wins everything. Especially if Amazon winds up competing in the healthcare space in other areas, then some big healthcare players may prefer to leverage Teladoc vs Amazon’s service. (all speculation for now)
I think the space is real, and the concept is real, and the value is real. So the upside potential is something legitimate in my eyes. Only question is whether the company is executing, building a moat, has invested leadership, and has made smart M&A moves (ala Best Doctors) that predict how they will continue to invest in the future?
Here’s a testimony from a Fool analyst Jason Moser not long ago. He’s also mentioned it a few times on Market Foolery podcasts and he seems to be quite bullish.