The coronavirus pandemic has shifted just about every part of life online for most of us, from work to school to doctor visits.
And with COVID-19 cases surging across the country and restrictions returning, one stock looks like an interesting pick for investors seeking a business at the crossroads of health care and technology.
Teladoc Health (NYSE: TDOC) shares have risen more than 128% so far this year. Over the last month, however, the stock has fallen around 11% as positive coronavirus vaccine news hampered stay-at-home stocks.
But Teladoc was disrupting the healthcare space even before the pandemic, and won’t be displaced when the world emerges from the coronavirus crisis once a vaccine is widely available.
With a market cap north of $25 billion, Teladoc specializes in remote health care services and analytics. The company completed its acquisition of artificial intelligence company Livongo just last week, and has been developing ways to provide preventative treatment via “digital maintenance” technology where a patient’s entire health journey is digitized.
“Both Teladoc Health and Livongo were founded with the same mission: to create a new kind of healthcare experience, one that empowers people everywhere to live their healthiest life,” said Teladoc CEO Jason Gorevic in a statement. “Together, our team will achieve the full promise of whole-person virtual care, leveraging our combined applied analytics, expert guidance and connected technology to deliver, enable and empower better health outcomes.”
Todd Gordon, founder of TradingAnalysis.com, said this week, “This company… has a possibility to really disrupt the health care system as we know it over the next decade.”
“The total addressable market is… just around a half a trillion dollars going forward, so, in light of this new health care, digital, work-at-home, stay-at-home, maybe health-care-at-home age, I’m really liking the outlook from a technical point of view as well as a fundamental point of view,” Gordon added.
Looking at Teladoc’s chart, Gordon said its 583% rise since its 2015 IPO is nothing short of “amazing,” and noted that the stock has recently been in a consolidation range.
“I would say, in light of the recent market volatility, the shape of this correction is nothing to be concerned about,” Gordon said. “In fact, I think it’s actually quite constructive.”
In applying Elliott Wave Theory to Teladoc’s chart, Gordon believes the stock is at the end of a so-called corrective wave.
According to the theory, stocks typically correct in an A-B-C pattern where A represents a leg lower, B represents a leg higher before falling again with C marking the final leg lower. Gordon added that this pattern is “fortified” when the A and C legs are roughly the same size, which has played out in Teladoc’s chart, indicating the stock is poised to begin a move higher.
“The correction looks to be complete,” Gordon said. “It looks like we’re staring to move up here. We just reported earnings. They were very strong. They just settled that merger with Livongo last week. The volatility is well out of the stock, and I think it’s set to rebound.”
“I will be looking to add this stock to my portfolio as well as to our clients’ portfolio,” Gordon added.