I’ve been watching Teladoc (TDOC), a “telehealth” company that lets users videoconference with MDs instead of seeing them in person. The company I work for is a customer, and I believe I have some coverage included in my health plan, but I’m ashamed to say I haven’t tried it out. Darn good health. (sarcasm)

Obviously this could be a game changing idea, but like so many others (renewable energy for instance), I’m not sure that there’s a great way to make money from it – Teladoc included. But let’s take a look.

One point in their favor: Teladoc is the clear leader:
Teladoc commands an impressive 75% market share in the telehealth industry.
The company has over 7,500 customers, including more than 220 of the Fortune 1000 companies.
Also, Teladoc estimates a total U.S. market opportunity for telehealth of more than $29 billion.…

One point against: Teladoc’s share count has risen at an alarming rate, going from under 39M at the end of the March 2016 quarter to over 54M at the end of March 2017. This alone is enough to make me at least want to wait until things settle down. One reason the share count has grown is that they have been very acquisitive, and they just announced another one yesterday: they’re paying $440M in cash and stock for a company called Best Doctors.… They’re taking on $200M in convertible debt too.

Another point for: They’re growing like a weed, of course. Revenue is up 60% YoY or better the last several quarters. Organic revenue was up 41% in the March quarter. They also hit Total Membership of 20.1 million (up 34% YoY), and Total Visits of 384,839 (Up 60% YoY). That visit growth is extremely intriguing. Gross profit is over 70%…basically they have all the other elements of the land and expand companies I like.

Another point against: Unsurprisingly, they’re burning cash. Adjusted loss per share was 1.39 in 2016, and it’s supposed to be close to 90 cents again in 2017. Plus they’re also taking on debt with the acquisitions, as I mentioned.

I guess the overwhelming question I have is: How do you handicap the fact that a lot of the growth is from acquisitions? I mean, organic revenue growth was 41% – that’s good, but maybe still a “wait and see” kind of good, at least while the share count is rising close to 40% in a year. But visit growth was 60%. That’s absurd growth, and seems to suggest they’re integrating acquisitions well.

So far I’ve taken a “wait and see” approach. The shares jumped to over $32 in July 2015 – the month they IPO’d. Then nothing went well until May 2016 when they bottomed out under $10 (!) per share. I started watching them somewhere in the teens, and now they’re right back up to over $32, so my wait and see approach is looking pretty genius so far. (sarcasm)

Anyway, thought I’d throw it out there and see if I could get anyone else interested. Still waiting and seeing, but this is an interesting new business.



First mover is important, but too often pioneers get surpassed. I don’t see any real mote. Doesn’t appear to be anything that glues the customers to them other than convenience and familiarity. Yes? Is there some other compelling reason for someone that signed up with them originally to stay with them when a better or cheaper mousetrap comes along?

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FWIW TDOC bot a competitor yesterday (Best Doctors) with a network of 50,000 professionals for 440M.…


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I just started looking at this today. So I only have first impressions.

The revenues (2016 numbers) will increase by about 42% as a result of the acquisition. But Best Doctors is a slow grower (<10% annual increase expected) compared to Teledoc (>50%). It’s losing money too.

One wonders what kind of synergies will occur.

This looks like a very interesting company, albeit one that is losing a lot of money at this time. I would like to figure out why this is so and what will happen that allows them to become profitable.

On a lighter note, it looks like their per share loss has decreased and is steady. There has to be some advantage to diluting shareholders. :slight_smile:

If it’s like SHOP (spending on the expansion to set up future business), this may be a good investment. However, it may be a company that needs to spend too much to become profitable.

I’ll take a look at this as well and see where the analysis leads me.

Thanks Paul!




I have been monitoring these guys for a few years from within my “Ageing” mega trends portfolio as well as a potential competitor to a digital health company I am a non executive director at in Singapore.

Teladoc have had a very up and down and up path to their current position.

Teladoc positioned itself purely in the tele health space doing doctor to patient tele or video consultations which whilst sounding radical is fairly one dimensional. They compete against many other tele health players in the US and a million more out of India - including the likes of Amwell which has received investments from TEVA.

Teladoc appears to be running 2 strategies… 1) A rollup strategy of hoovering up all tele health competitors that they can and 2) a build out strategy adding a broader set of solutions to their service.

They are getting more interesting as they start to “attach” more solutions to their platform but I still can’t help but feel they are under serving the US market - not that I particularly want a competitor to get it right.

Telehealth companies seem to have 3 Go To Market strategies - a B2C strategy, a B2B2C strategy and a B2B strategy. Most of the B2C approaches appear to be via a tele consult service or an online search directory/rating YELP like approach. B2B2C appear to be either via insurance companies or corporate health plans. B2B usually target providers. I do not like the B2C approach - most of these end up nowhere. B2B2C is usually much more successful.

The way my company approaches this is to act as a digital smart health concierge that supports all of a patients needs with integrated solutions across the patient pathway including but not limited to tele/video consultation, electronic portable health records, e-referrals, lab result downloads, smart health device/wearable attachment APIs, insurance plan integration, e-prescribing, health screening and health and wellness applications.

If Teladoc is heading in this direction then I think it will be on a surer footing. To do that it might have to buy into semi-related areas like lab result companies (which it did) and seemingly slower growth players that add solutions to their platform rather than pure growth.

BTW there was a recent thread over on the NPI board which you might find interesting about an acute care digital health outfit - zoom care (there’s also a zoom doc which adds to the point about a crowded space).…