Down More Than 55% From Their 2020 Highs, is Now a Good Time to Buy Telehealth Stocks Teladoc, iRhythm, and American Well?

NYSE: TDOC | Teladoc Health, Inc.  News, Ratings, and Charts

TDOC – As the COVID-19 pandemic has rampaged around the world, telehealth has burst onto the scene as a lifeline to individuals who require medical help. However, with most of the U.S. population having now received COVID-19 vaccinations, more people are resuming outdoor activities, resulting in a decline in the growth of telehealth. Given this backdrop, we think it could be wise to avoid telehealth stocks Teladoc Health (TDOC), iRhythm (IRTC), and American Well (AMWL) even though they have declined more than 55% in price from their 2020 highs. Let’s discuss.

The telehealth industry has been growing at an accelerated rate since the onset of the COVID-19 pandemic because people have preferred to get medical health checkups virtually to prevent the transmission of the virus. As a result, telehealth stocks peaked in 2020.

However, investor interest in the telehealth industry seems to be ebbing. With 64% of the U.S. population fully vaccinated, Americans are venturing outdoors and are returning to visiting their doctors personally. According to Christina Farr, a venture capitalist at OMERS Ventures, “The bigger macro trend here is that telehealth is starting to see some declines from the peak during the pandemic where we didn’t have much choice other than to see our providers virtually.”

Given this backdrop, we think it could be wise to avoid fundamentally weak telehealth stocks Teladoc Health, Inc. (TDOC), iRhythm Technologies, Inc. (IRTC), and American Well Corporation (AMWL) as they are expected to witness slower growth.

Click here to checkout our Healthcare Sector Report for 2022

Teladoc Health, Inc. (TDOC)

Dallas, Tex.-based TDOC provides virtual healthcare services with a portfolio of services and solutions that include medical subspecialties from non-urgent, episodic needs, such as flu and upper respiratory infections, to chronic, complicated medical conditions. Its brands include Teladoc, Livongo, Advance Medical, Best Doctors, Better Help, and HealthiestYou.

TDOC’s net loss has increased 135% year-over-year to $84.34 million. The company’s EBITDA loss increased 28% year-over-year to $8.70 million. And its total expenses increased 88.7% year-over-year to $582.23 million.

Analysts expect TDOC’s EPS to remain negative for this year and next. Over the past year, the stock has lost 75.6% to close the last trading session at $69.58.

TDOC’s POWR Ratings reflect these bleak prospects. It has an overall F rating, which equates to a Strong Sell.

TDOC has a D grade for Value, Momentum, Stability, Sentiment, and Quality. It is ranked #84 of 86 stocks in the Medical – Services industry. Click here to see the rating of TDOC for Growth.

iRhythm Technologies, Inc. (IRTC)

IRTC in San Francisco is a digital healthcare company that focuses on diagnosing cardiac arrhythmias by combining its wearable biosensing technology with cloud-based data analytics. The company has a portfolio of ambulatory cardiac monitoring services on a platform called the Zio service, which consists of wearable patch-biosensors, Zio XT, and Zio AT monitors, which record and store ECG data from every patient heartbeat for up to 14 consecutive days.

For its fiscal third quarter, ended Sept. 30, 2021, IRTC’s gross margin was 65.7%, representing an 8.9% decrease from the year-ago period. The company’s operating expenses increased 35.7% year-over-year to $79.40 million. Also, its net loss increased 404.2% year-over-year to $23.70 million.

For the quarter ending Dec. 31, 2021, IRTC’s EPS and revenue are expected to decrease 254.5% and 0.9%, respectively, year-over-year to $1.17 and $78.11 million. The stock has declined 52.5% over the past year to close the last trading session at $118.33.

IRTC’s weak prospects are reflected in its POWR Ratings. It has an overall D rating, which equates to a Sell. IRTC has an F grade for Growth and a D grade for Value, Momentum, and Stability. Within the D-rated Medical – Diagnostics/Research industry, it is ranked #44 of 59 stocks. To see the other ratings of IRTC for Sentiment and Quality, click here.

American Well Corporation (AMWL)

AMWL is a Boston-based telehealth company whose Amwell Platform provides a complete digital care delivery solution that equips its health system, health plan, and innovator, including government clients with the tools to enable new models of care for their patients and members.

AMWL’s revenue decreased 0.6% year-over-year to $62.20 million. The company’s adjusted EBITDA loss increased 20.2% year-over-year to $31.50 million. Also, its sales and marketing expenses have increased 19% year-over-year to $16.37 million.

Analysts expect AMWL’s EPS for its quarter ending March 31, 2022, to decrease 18.8% year-over-year to $0.19. Over the past year, the stock has declined  88.8% in price to close the last trading session at $4.25.

AMWL’s POWR Ratings reflect these bleak prospects. It has an overall D rating, which equates to a Sell. AMWL has a D grade for Sentiment and Quality. In the D-rated Medical – Services industry, it is ranked #72 of 86 stocks. Click here to see the additional ratings of AMWL for Growth, Value, Momentum, and Stability.

Click here to checkout our Healthcare Sector Report for 2022


TDOC shares were trading at $68.72 per share on Thursday afternoon, down $0.86 (-1.24%). Year-to-date, TDOC has declined -25.16%, versus a -8.73% rise in the benchmark S&P 500 index during the same period.


About the Author: Dipanjan Banchur


Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets. More...


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