TELADOC. Beaming the Doctor-And Fast Growth-To You.

Med., computer,
Relentless cost-pressure everywhere makes virtual medicine a slam-dunk. Precise timing of any  wide market adoption remains unclear.  But it’s coming.  Meanwhile, TDOC is rocketing, and now rolling as the biggest and best positioned in the world.  But just like other true growth stories, don’t judge TELADOC  on earnings.  You’ll miss your appointment.

Nearly

all legendary market wins once looked like TELADOC; no earnings, no firm valuation, maybe some hype, hope, and something else–an idea maybe.  Some have near inevitability.  TELADOC seems to be inevitable, and on time.  TELADOC has all of that and much more.

 

 

One year sales growth–109%.  Three-year sales growth–75%.  That’s revenue.  That’s TELADOC.  Here’s the highly plausible TELADOC CEO Jason Gorevic following the release of Q1, ’18 quarterly results;

 

 

“I’m very pleased with our performance during the intense 2018 flu season, providing yet another proof point for the inevitability of virtual care as a critical component of the healthcare system,”–Jason Gorevic, TELADOC CEO

 

The settlers of the American west didn’t have spas or sushi.  Stock settlers don’t have P/Es or a Peg ratio.  We’re not going to get those here.  Speculative stock is pioneering, meaning rough.  But we have a stair-steeping revenue record and a story, and footprints–charts.

 

 

 

countryside-336686_1920
As rural populations continue to contract, the pressure on rural hospitals and medical care will only increase. Folding that space digitally seems the sole way of reaching the resultant stranded. Cost and attempts to improve care will no doubt lead medicine through the virtual portal. This is known as “revolutionary change.”  It will be disruptive and huge.  Think Amazon and retail.  No?  Stay tuned.

 

 

 

How about the online education industry?  Is that industry a corollary for online medicine?  Yes, except virtual medicine will be run better, funded better, more respected, and will inevitably include everyone.

 

 

The online education business has a deservedly bad reputation, for many reasons.  The industry’s been plagued by financial fraud, very low graduation and in-field placement rates, and customers/students left with crippling debt.  None of that is a real surprise, when one realizes the industry is primarily owned and run by private equity.

 

 

Virtual medical care seems poised to disrupt medicine precisely like e-commerce did to brick-and-mortar.

 

 

Medicine is a very different business, one not primarily controlled by private equity.  Every player in the field operates under heavy pressure to cut costs, increase productivity, and increase efficiency.

 

How efficient could it be to handle many cases online?  Simple answer–extremely.  How much value could there be in a nearly instant virtual connection to a specialist–any specialist?  Those are but two gems offered by the virtual approach to medicine.  The time savings alone are massive, if not determinate.  Wider access to specialists will prove lifesaving

 

 

Charts, TDOC, 6-12, full, X
How much sense does virtual medicine make? Tons. In fact, it’s the future corporate America is beginning to embrace now.  It’s early days.  Yet TDOC is by far the largest and best positioned player in a still limited field. Steve jobs sold Apple.  Personality matters.  CEO frontman Gorevic is as smooth as glass–but plausible.  TDOC represents fast, easy, ubiquitous, cost-effective medical care right on your phone. Who else offers that?  Think companies might be interested?

 

 

How much of your time, wits, and productivity, have you lost parked on your can in some cramped room full of coughing children?  What they’re coughing up you don’t want.  Think flu, or worse.  Who doesn’t resent 90 minutes routinely wasted by schedulers?  Right.  And you’re not alone–and TELADOC knows this.

 

 

6-12-18.

Chart, TDOC, X, 6-12, 117d
TDOC suggests a TAM(total addressable market) of 60 billion. Can say UNH, upend TDOC? CEO Jason Gorevic claims barriers to entry–difficult replicate their development and positioning. TDOC is the clear leader in the new space.

 

 

 

TELADOC is speculative.  Any market cap totaling $3.7b is speculative, very speculative.  TELADOC also has no earnings, oops, we mean they have negative earnings.  Yet that is the very nature of such companies in early days.  The early days are also where the very biggest money is made when such companies explode their growth.  Some mistakenly refer to such as “easy money.”  Right.

 

 

 

Don’t look for earnings here.  TELADOC is speculative–in early day.  Instead watch revenue growth(109%y/y),  “paid memberships,” and “Total Visits.”

 

In place of earnings we turn to revenue.  TELADOC posted Q1, 2018 revenue growth of 109%.  Any way you slice it that’s very fast growth.  In fact the company has posted very strong revenue growth year after year since 2015.

 

 

TELADOC guides for adjusted EBITDA going positive this year at $7-10m.  Full year revenue is projected at $350-360m.

 

 

TELADOC is using the now widely employed membership model.  Like NFLX  membership growth represents the company’s prime metric after sales.  Q1, 2018 paid memberships totaled 20.8 million, posting a growth rate of 41%.  Full year ’18 membership guidance calls for 22-24 million at year’s end.”Total Visits,” the other main metric hit 606,000, posting a 57% growth rate.

 

 

The actual and estimated revenues create a rising staircase–2015-2019E.  REVENUE(millions, USD): 2015-77.4m, 2016-123m, 2017-233m, 2018-358.7mE, 2019-452E.  The corresponding revenue percentage growth rates are: 77.8%, 59.2%, 89.4%, 53.8% ’18E, 26% ’19E. 

“Can you see the doctor now?”

 

UPDATE; 6-14-18: TELADOC(NYSE: TDOC) HIT AN ALL TIME HIGH INTRADAY $60.10, UP FROM THE PREVIOUS $59.75.  WAIT FOR A BETTER ENTRY POINT.  THAT MAY REQUIRE TIME.  BUT THEN, THIS IS EARLY TDOC DAYS.  Sj.  

 

TELADOC(NYSE: TDOC)

INVESTOR RELATIONS

http://ir.teladoc.com/financial-info/quarterly-results/default.aspx

 

Thanks for reading.

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Additional resources:

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