ONEM - Is Teladoc a Top Stock to Buy Now?
Teladoc Health's (NYSE: TDOC) meteoric rise to prominence this year shows no sign of slowing, with the company reporting impressive positive results in its July 29 earnings report as a result of strong tailwinds from the ongoing pandemic. Between Teladoc's accelerating year-over-year quarterly revenue growth of 85%, totaling $241 million, and the addition of 92% more subscribers compared with 2019 for a total of 51.5 million people, the company's popularity is paying off handsomely for its investors. The $18.5 billion merger with Livongo Health (NASDAQ: LVGO) announced Aug. 5 shows that the company is eager to increase its telehealth market share and its services even further by adding integration with Livongo's health sensor and patient analytics capabilities.
With social distancing policies showing no sign of ebbing in the U.S., it's no surprise that consumers are showing strong interest in accessing telehealth. Few would dispute that Teladoc is moving more rapidly than any of its competitors in telehealth, most of which are smaller private companies. Potential investors may still be wondering whether the company's long-term future is bright, especially in light of the market's largely negative reaction to the news of the merger with Livongo, which saw Teladoc's stock drop by more than 15%. Given that the stock's massive growth this year could be based on hype rather than sound fundamentals, will Teladoc's stock pay off for the investors who purchase it today at a relative discount? Let's compare the reasons for and against buying Teladoc stock to answer this question.
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