TDOC is undervalued; long-term telemedicine adoption supports ~30% upside over 12-18 months (fair value $7.86 vs price $6.13).
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The first undervalued healthcare stock I would classify as a buying opportunity here is Teladoc Health . Remember, the business of "Tilladock Health" has flourished tremendously.
Revenues increased more than 5 times as people wanted to access healthcare during the pandemic , but tried to avoid visiting doctors' offices, hospitals and healthcare facilities as much as possible.
Therefore, any opportunity that people had to make telemedicine visits during that time was taken advantage of.
However, since the reopening, the business of "Tiladock" has stabilized . Revenues have peaked and are now flattening out in one of its business segments , and declining by nearly 20% in the other, according to the management team.
To adapt to these changing circumstances, the company is reducing advertising spending, improving efficiency, and taking advantage of the increased availability of healthcare providers on its platform.
Overall, I think its long-term prospects are positive as there is a growing opportunity to replace some in-person visits with virtual ones. Now, we will never see a 100% replacement of in-person visits by telemedicine visits, but there is an opportunity to increase the overall percentage.
I believe that " Tiladock" will benefit from this positive momentum.
I calculated the fair value of this company at $7.86, while the current market price is $6.13. Therefore, I see potential for growth here of approximately 30% for Teladoc Health over the next 12 to 18 months.
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Parkev Tatevosian, CFA has only this one call on this stock.