Unlock: Teladoc (TDOC) – Shoots Up +20% Post Earnings
It pays to do fundamental research. We have written extensively in last 12 months about strong future prospects of TDOC with low penetration in fast growing total addressable market size. Below is our discussion in JaguarLive chat room day before earnings. Stock is higher by +20% today post earnings. To learn more about our approach and how you can become a successful trader, sign up for 4 week trial and test drive live chat room with some of the best traders: SUBSCRIBE
May 8, 2017
Teledoc (TDOC) – Reports earnings tonight. Let’s recap history since start of year to give you better view into fundamental growth story:
On January 11 – Avo wrote a beautiful long term bullish piece on home page discussing increasing membership in what is very large $29 billion addressable market size and yet with only 1% market penetration at this point, leaving substantial opportunity to grab in the future. See HERE.
On March 1 – first time we saw call buying pick up. Buyer of 1,000 October 22.5 calls paid $3.10 to $3.50 offer side. Approx $330,000 bullish bet, the biggest in option chain that remains in open interest. See snapshot below.
On March 14 – Hedge fund Tiger Global filed 13G with SEC revealing 9% stake in the company. See filing HERE.
On March 16 – Baird initiated coverage with Outperform rating with title “Boarding the Telehealth Rocket Ship.” The key line in this note that gets my attention is precisely the same point that Avo made in January about big market and low penetration:
“The American Telemedicine Association estimates there were approximately 1.25M telehealth visits in the US during 2016, implying penetration remains very modest (below 1%). However, large group employers are rapidly incorporating telehealth into plan designs, and Towers Watson estimates >90% of large employers will include some form of telehealth benefits by 2018, up from ~30% in 2014. Additionally, we believe access to telehealth within other market segments is poised to improve over the next several years.”
On March 27 – Analysts at Chardan met with management and came back with following comment:
“The tone sounded confident in pointing toward guidance for 2017 and optimistic about the continued strong interest of sales prospects in telehealth so far in 2017.”
On April 10 – Piper Jaffray stated that if the healthcare bill passed by the House gets approved in the Senate, the new legislation could add more than 50 million to addressable market size because it provides Medicare members with coverage of telemedicine services. Note TDOC has commanding 75% market share so it would be seen as the biggest beneficiary.
