When it comes to future industries, it's hard not to take a look at Telehealth. Due to COVID-19, Telehealth came to the forefront, allowing doctors to digitally assess and meet with their patients.
Companies such as Teladoc, Livongo, One Medical, Humana, CVS Health, and Amwell, have all pounced on the major opportunity presented by the global pandemic.
Given the insane growth numbers coming out of these companies, investors are wondering which Telehealth plays are the best and who to invest in.
Starting with what is believed to be the best Telehealth play, Teladoc has been growing at rapid rates.
Teladoc’s services have been in high demand and the company is growing quickly. In the Q2 report not long ago $TDOC reported a massive 203% YOY increase in total visits (Totalling 2.8 million visits for the quarter).
Not only that but the company reported great Q2 earnings. While EPS did miss at $-0.34 compared to the expected $-0.23 EPS, revenue was stellar.
Revenues beat expectations for Q2 and came in at a whopping $241 million (an 85% YOY increase). While Q2 was great and saw rapid growth the terrific guidance only goes to show $TDOC’s potential.
Teladoc expects Q3 to be a massive quarter as well. Currently, the company believes that revenue will grow 103% in Q3 ($275 million to $285 million).
Furthermore, $TDOC is making massive moves. Teladoc announced the purchase of $LVGO (Livongo Health) for $18.5 billion several weeks ago.
Livongo health being a competitor in the telehealth space, made it an excellent addition for the company. The deal will expand the market share of $TDOC and once the merger is complete the expected revenue is estimated to be $1.3 billion for 2020.
Moving into Humana, a major health insurance provider, the company is attempting to get in on the Telehealth trend.
Recently, Humana partnered with Doctor on Demand, to bring their insurance customers virtual health services. The partnership will allow Humana customers to access no copay video visits with doctors.
This is big for Humana, because it's allowing the company to jump in on the major Telehealth trend and potentially become a major competitor.
Taking a look at the most recent earnings report, Humana reported a Q2 beat. The company reported an EPS of $12.56 versus the expected analysts EPS consensus of $10.27. Not only that, but Humana maintained solid revenue, which totaled $19.1 billion in Q2 of 2020.
Taking a look at the previous year, Humana totaled $64.8 billion in 2019 revenues. In short, if companies as large as Humana are getting in on the Telehealth game, the industry definitely has future growth on the way.
A newer name in the Telehealth space, Amwell recently entered onto the public market, and the outlook isn’t bad.
Digging into the financials the numbers are mixed. While AmWell’s revenues were up 77% in the first half of 2020, totaling $122 million, the net loss to revenues ratio continued to rise, increasing from 46% in 2018 to 93% in the first half of 2020.
On a more positive note, AmWell reported that health systems subscriptions rose 32% in the first half of 2020 and the sheer volume of consultations increased 200% in Q2 of 2020 compared to Q1 of 2020.
Not only that but major companies such as Alphabet are getting in on the action. Alphabet recently made a $100 million investment in AmWell, showing confidence in the future of the company.
While there are many other companies dabbling in the Telehealth space such as CVS Health and Goodrx, I firmly believe that Teladoc is the way to go given the expected growth, current market share, and recent merger with $LVGO.