Teladoc (NYSE: TDOC) is one of the largest companies in the telemedicine space, expanding its reach with the acquisition of Livongo in 2020. Teladoc forecasts revenue growth of between $367 million to $467 million by the end of 2022 with total visits expected to rise between 20% and 27% from 15.4 million a year ago. Despite this ambitious forecast, Teladoc's share price is currently down 67% year-to-date.
COVID-19 has acted as a catalyst for growth, and many analysts are expecting the telehealth industry to grow by a compound annual growth rate of between 32.1% and 36.5%, leaving the global market size at between $636.38 and $784.7 billion by 2028. In an industry with exciting prospects, we investigate Teladoc's competitors.
Amwell (NYSE: AMWL), formerly known as American Well, is a telemedicine company founded in 2006 and went public in 2020. It is currently the biggest competitor to Teladoc in the telehealth space and has experienced significant growth in recent years.
Amwell entered into a strategic partnership with Google Cloud to collaborate on technology and innovation, and Alphabet invested $100 million. It also has a partnership with Apple. These partnerships validate the business and are a positive sign for investors.
Q1 2022 saw an increase in revenue from $57.5 million a year ago to $64.2 million. Subscription revenue represents 45% of the company's total revenue. This recurring revenue allows for more reliable forecasts as it is a more stable revenue stream. Its gross margin increased to 42.8% of revenue after it fell to 38% last year. Its net loss increased by 77% to $70.3 million. Total active providers have risen from 91,000 in December 2021 to 102,000 in Q1 2022.
Amwell continues to enhance its mental health offerings which are evident in its acquisition and integration of SilverCloud Health in August 2021. Anthem is its largest customer and makes up 25% of revenue which is a risk to the business. The company's revenue forecast is also not as ambitious as Teladoc, with full-year revenues expected to rise between 8.78% to 12.74%, but shareholders are unlikely to be swayed too much by this as long as these targets are met.
Amwell's share price is currently down 48% year-to-date. Many tech stocks are having a similar experience as investors remain wary of rising interest rates and the potential of stagflation.
1life Healthcare Inc operating as One Medical (NASDAQ: ONEM) is a membership-based primary care company that provides both; in-person and virtual care for an annual subscription fee of $199. It went public in 2020 and is not a pure play due to its 103 medical offices but capitalizes on the telemedicine trend.
In Q1 of 2022, revenue was $254.1 million, a 109% increase year-over-year. However, it is unprofitable. The company reported a net loss of $90.86 million compared with a net loss of $38.32 million the year prior. The company once had a strong balance sheet, but this has fallen over the past two years. In Q1 of 2022, One Medical had cash and short-term marketable securities of $381 million, which is down from $453.6 million in December 2021. Like Amwell, One medical is also reliant on a limited number of payers for its revenue. However, their largest client makes up 13% of the company's revenue, almost half that of Amwell's largest client, which makes One Medical a significantly less risky investment. The lower the concentration of revenues a client possesses the less bargaining power they have when renegotiating fees.
The membership count increased by 28% YoY to 767,000, excluding short-term customers. Similar to the other telehealth stocks discussed, One Medicals' share price is also down. The company has lost 52% of its market capitalization year-to-date due to a sell-off in technology stocks.
Amazon (NASDAQ: AMZN) may seem like an unlikely addition to the list, but it has made forays into both the healthcare and telehealth space which warrant its addition. In 2018, Amazon acquired PillPack as part of its push into the online prescription market and rolled out Amazon Pharmacy.
Amazon has not always been successful, in 2021 it ended its joint 'Haven' venture with Berkshire Hathaway and J.P Morgan Chase & Co. Even though the mission was not successful, the knowledge gained through this venture proved to be beneficial as Amazon went to expand its Amazon Care.
Amazon Care provides virtual and in-person care with a mobile app that facilitates remote video chat with physicians. Follow-up visits and prescription delivery are also offered through the app. Amazon Care's virtual health services are available 24/7 throughout the US, while its in-person services are currently available in five cities, with 15 more to be added this year.
Perhaps Amazon's most significant advantage is the large cash pile it can put into this segment as it continues to enter the space. In Q1, it had close to $17 billion in free cash flow on its balance sheet which leaves ample funds for future expansion into the telemedicine space.
While Amazon is a competitor to Teladoc, the two are also in a partnership. Since February 2022, customers can contact a Teladoc call center through supported Echo devices. These services will initially be provided as audio consultations, with video visits to be rolled out soon. Costs range from $0 with insurance to $75 without. Access to this vast amount of data could prove vital as Amazon looks to its own telehealth offerings to help boost revenue in a year where its share price is already down 37% YTD.
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