NYSE: TDOC
Teladoc Health, Inc., founded in 2002, is a leading multinational telemedicine and virtual healthcare company headquartered in Purchase, New York. The company offers a comprehensive range of services, including telehealth consultations, mental health support, chronic condition management, and AI-driven analytics. Utilizing a secure technology platform, Teladoc connects patients with licensed healthcare professionals via mobile devices, the internet, video, and phone, providing on-demand remote medical care. As of 2023, Teladoc serves over 80 million people across more than 130 countries, aiming to make high-quality healthcare accessible and convenient for all.
Aidan Simpkins, a Private Equity Analyst at Righting Group and finance student at Northeastern University, conducted this in-depth stock analysis. With expertise in financial modeling and equity research, he built a detailed DCF model to support this investment thesis, leveraging market insights and valuation techniques to identify this stock’s potential.
Aidan Simpkins, Director
Telehealth Industry
The industry that Teladoc falls under is rapidly growing, with major opportunities for expansion. The telehealth industry is valued at $28.1 billion, with a $791.04 billion Total Addressable Market (TAM), alongside an estimated CAGR of 25% from 2024 to 2030. It is safe to say that Teladoc is in a prime position to take advantage of this, as it is the leader in the telehealth industry and benefits from its personal CAGR of 32%. This suggests that the company will likely continue to outgrow its competitors and capture even more of the industry with its robust products. Globally, 78% of people own some sort of smartphone, and in an age where everything is online, being accessible via the internet gives the telehealth sector significant promise for the future. It is worth noting that telemedicine usage in the United States only decreased after COVID-19, when it accounted for 69% of all doctor-patient visits. Teladoc’s market cap during COVID peaked at $44.7 billion and currently sits around $1.6 billion. It is waiting for a catalyst, and it is only a matter of time before analysts realize the value in the sector.
Artificial Intelligence
In 2024, we saw the emergence of AI chips and how they affected the market. It is agreed that by 2025, we will start to see how companies implement AI to improve their businesses. Few are in a better position in the telemedicine industry to benefit from this than Teladoc. With over 93.9 million current users, the company has positioned itself in such a way that it owns enough of the total market (~15%) that smaller tech companies are more likely to collaborate with larger organizations (Teladoc) by selling their products to them, rather than risk competing for market share. This approach fosters strategic partnerships that benefit both parties, allowing smaller firms to leverage established distribution channels while avoiding direct competition. Furthermore, on November 25th, 2024, Teladoc released its new AI capabilities to select clients to enhance its Virtual Sitter solution, which improves care delivery for hospitals and health systems. Nearly one million patients fall every year, with more than 30% resulting in lasting injuries, causing over $50 billion in costs, according to the CDC. Many of these falls could be prevented by a nurse or physician, which is where Teladoc comes into play. With its new AI capabilities, such as pre-trained algorithms, motion detection, and pose estimation, Teladoc says its remote staff can manage up to 25% more patients in the same amount of time, accurately predicting falls and ensuring safety. Teladoc aims to enable these new features in more hospitals as they become more comfortable with the technology.
Looking back on the administration that Trump won in 2016, we saw a loss of $1.6 trillion when he signed the TCJA (2017), which applied long-term pressure toward Medicare and Medicaid cuts. Regarding his upcoming term, the U.S. Treasury analysis reveals that extending both individual and estate tax provisions of the TCJA could cost $4.2 trillion between 2026 and 2035. This will leave the government with significant losses in revenue, leading to possible budget deficits and, in turn, less spending. Hospitals account for about 10% of all general spending, totaling over $300 billion from the government. Although there is no guarantee of reduced federal spending on hospitals or health programs, there is a strong possibility of it. A sector that could benefit from this, however, is telehealth, as it provides less expensive care and may be able to attract more customers. An example of this is during Reagan’s presidency when Medicaid expenditures were reduced by more than 18%, and the Department of Health and Human Services budget was cut by 25%. As a result of these massive cuts, 600,000 lost Medicaid, more than 250 community health centers were closed, and 309 rural hospitals and 294 urban hospitals were shuttered. Although I do not expect such a dramatic impact, there is no doubt this is an interesting field to watch as the new president takes office.
Political Landscape
The 2025 M&A outlook highlights trends that could significantly impact the telehealth market, including Teladoc Health, offering promising opportunities for investors. Consolidation in the dispersed telehealth industry is anticipated to be fueled by improved macroeconomic conditions and growing CEO confidence. Teladoc can capitalize on this trend by possible acquisitions to expand its service offerings or enhance its AI-driven healthcare capabilities, positioning itself as a leader in the global telehealth market, which is projected to grow at a CAGR of 25% through 2027. Furthermore, the trend toward corporate simplification may lead to the sale of non-core assets by larger healthcare providers, which would open up acquisition opportunities for Teladoc to incorporate its specialized skills—such as chronic disease management or behavioral health—which currently generate more than 30% of its revenue. The growing focus on AI-driven M&A aligns perfectly with Teladoc’s strategic goals. The global AI-powered diagnostics market is expected to grow at a CAGR of 40% by 2030, and Teladoc’s integration of AI into its offerings could significantly enhance operational efficiency and patient outcomes. Private equity dynamics also support this growth, with substantial capital availability likely to fuel further innovation and expansion. For investors, Teladoc’s ability to execute on these trends positions it as a strong contender in a rapidly evolving industry, enhancing its appeal to future investors.