ROBO Global views Teladoc Health as top global telemedicine market leader

The report said Teladoc has built a ‘wide moat of competitive barriers’ by investing more than $100 million over the course of a decade to build its platform to scale

ROBO Global views Teladoc Health as the No 1 global telemedicine market leader
The ROBO report estimates that Teladoc Health will conduct 4 million virtual doctor visits this year, up from 1 million just two years ago

Analysts at ROBO Global view Teladoc Health Inc (NYSE:TDOC) as the dominant player in the telemedicine market with a solid presence in 130 countries driving steady revenue.

Purchase, New York-based Teladoc Health provides remote medical care through mobile devices, the internet, video and phone. Teladoc’s core telemedicine service is utilized by patients for illnesses, such as sinus infections, allergies, or urinary tract infections.

With its flourishing virtual healthcare services platform, Teladoc is a member of the ROBO Global Healthcare Technology and Innovation ETF (NYSE:HTEC), which consists of 80 stocks across 9 subsectors in 15 countries

READ: ROBO Global thinks PTC Inc's augmented reality solutions are "truly mind-blowing".

In a recent report, ROBO Global senior research analyst Nina Deka said: “Teladoc has over 37 million members through its client base. The client base itself boasts marquis accounts such as Aetna, United Healthcare, and several of the Blue Cross Blue Shield plans, as well as 40% of the Fortune 500 companies, small employers, and over 300 hospitals. They are becoming a global market leader, with clients in over 130 countries driving 20% of Teladoc’s revenue.”

The analyst said that although competition is intensifying, the industry has high barriers to entry as there are extensive regulatory hurdles that have to be met to practice medicine remotely.

“Additionally, in order to ensure an adequate supply of physician time, the company needs an extensive network. Teladoc has amassed a network of over 3,000 certified clinicians, similar to the way Uber Technologies Inc (NYSE: UBER) has built its supply of drivers,” said Deka.

Sophisticated predictive analytics system

Teladoc also uses a sophisticated predictive analytics system to ensure that the appropriate level of help is on hand, depending on seasonal variability.

“It’s this level of service that helps Teladoc generate member satisfaction of 95%. Telemedicine companies also need a scalable platform that they can leverage to meet the growing needs of consumers. To put this in perspective, Teladoc invested over $100 million over the course of a decade to build its platform to scale,” added Deka.  

The ROBO report estimates that Teladoc will conduct 4 million virtual visits this year, up from 1 million just two years ago.

“It has additional capacity that would enable it to take on 10x its peak volume at any given time. It would be very difficult for another company to replicate this scale without a high degree of capital investment,” said Deka.

The analyst said Teladoc remains well positioned to achieve organic growth target of 20-to-30% for the next five years by adding more clients across market segments.

The report noted that the Centers for Medicare and Medicaid Services has jumped onto the telemedicine bandwagon and would cover virtual visits for Medicare Advantage members starting in 2020. 

Last year, Teladoc partnered with CVS Health Corp (NYSE:CVS) to launch virtual visits through its MinuteClinic app.

Contact Uttara Choudhury at [email protected]

Follow her on Twitter: @UttaraProactive 

Quick facts: Teladoc

Price: 203.66 USD

Market: NYSE
Market Cap: $29.52 billion

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