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Actions of Teladoc Health (NYSE: TDOC) fell from post-pandemic peaks this summer, but the company’s business has continued to grow at an astounding rate. Now that this stock has fallen to a more reasonable valuation, Baird, an investment bank, today gave it an upgrade and a price target of $ 220, which is 18% above the closing price of Thursday.
Analysts have been encouraged by the strong and sustained adoption of Teladoc’s services throughout the coronavirus pandemic. Teladoc’s supplier network made more than 2.8 million virtual visits in the third quarter, more than three times the number of visits made during the period of the previous year.
Image source: Getty Images.
The explosion in the volume of visits was due to the access of new patients and to a rate of use that more than doubled year on year. Although more healthcare providers offer in-person services in the third quarter, Teladoc reported an annualized utilization rate 0.5% higher than the second quarter figures.
While some investors were upset by the company’s decision to merge with Livongo earlier this year, the combined business is already helping Teladoc gain new customers. Further customer cross-selling that took place before the company officially completed its acquisition of Livongo at the end of October led Teladoc to expect at least twice as many bookings in the fourth quarter as in the third trimester.
Livongo helps people manage chronic health issues using devices that track health signals and provide real-time suggestions. When Teladoc made its merger offer, Livongo’s flagship diabetes service had around 410,000 members, which was only a tiny fraction of the 34.2 million Americans with diabetes.
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