The number of confirmed cases of COVID-19 in the U.S. has surged from a few thousand last weekend to more than 13,000 as of Thursday evening.
California Governor Gavin Newsom issued a state-wide order for people to stay home.
The U.S. has closed its border with Canada and is working with Mexico to limit border crossings during the coronavirus crisis.
As the number of cases increase and the headlines become increasingly grim, virtual visits to Teledoc’s (NYSE: TDOC) online doctors have been soaring. And its shares have soared right along with demand for its services with the stock up nearly 67% so far this year.
According to the company, the COVID-19 pandemic has led to “unprecedented daily visit volume in the United States” on Teledoc’s platform with visit volumes up 50% last week.
“As we saw during the flu epidemic of 2018, a community’s health-care system can become overwhelmed and virtual care can help provide needed relief,” said Lew Levy, Teledoc’s chief medical officer, in a statement. “We have the unique ability to immediately connect with the CDC and other government agencies, to add the right screening tools and clinical quality protocols to our system, and most importantly, to keep patients—particularly those most at risk with underlying health conditions—out of care settings where they can face exposure.”
Given the surge in demand for Teledoc’s services, KeyBanc Capital Markets analyst Donald Hooker upgraded the stock from Sector Weight to Overweight this week and set a price target of $145.
“By our models, TDOC is now set for 30%+ revenue growth” in the first half of this year, Hooker wrote in a note. “Also, 50%+ of the new visits last week were ‘first timers’ which could translate to further utilization even as COVID-19 fears subside.”
Hooker wrote that he now expects Teledoc to beat earnings estimates, and said that higher utilization rates during the coronavirus crisis will help the company convince employers and insurance companies that pay for memberships of the service’s value over the long-term.
“Member utilization is how TDOC creates ROI and attracts clients,” the analyst wrote. “The ability of telehealth to redirect patients away from expensive emergency room and on-site physician office care drives significant cost savings for self-insured employers and health plans.”
CNBC’s Jim Cramer agrees that Teledoc stock is a winner now, especially after the Trump administration expanded Medicare telehealth coverage this week.
“Anything that lets you see a doctor without actually going to the doctor’s office is a winner during this pandemic,” Cramer said. “It’s cheaper, it’s more convenient, and it’s a heck of a lot safer.”