Healthcare: can these companies change the healthcare system?
Stock Market Analysis

Top Telemedicine Stocks To Keep Your Portfolio Healthy

As the healthcare system struggles with increasing demand, telehealth has seen its business model surge with patients distancing themselves from doctors

Since the outbreak of the coronavirus, the medical industry has had to quickly adapt to the need for less physical contact. Telehealth allows patients to get checkups from medical professionals via video link, almost like a Zoom (NASDAQ: ZM) for doctors. The way forward is telemedicine and these are the top stocks investors should be looking at. 

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Teladoc

There has been a huge demand for Teladoc (NYSE: TDOC) amid the coronavirus pandemic, which makes money by charging insurance companies for those with the service covered and offering a per-visit fee option to non-insured users.

At its recent earnings call the company announced a revenue increase of 41% year-on-year to $180.8 million, with its customer base also surging 92% to 2 million users. While both of these figures are impressive, Teladoc is not yet turning a profit and the stock could be considered overvalued.

Overall Teladoc has had a strong quarter and the demand for the leading telehealth service isn’t likely to decrease anytime soon. Based on its predictions for the year, it is set to more than double its full-year visits to between 8 and 9 million and post a topline between $800 million and $825 million. 

Anthem

Telemedicine is being used more and more by insurance companies including Anthem (NYSE: ANTM). The business offers Live Health Online to connect customers with health professionals in a safe way, whether for physical ailments or mental health problems. Anthem recorded 170,000 downloads for the digital app and a 250% increase for virtual care needs through both text and video during its latest quarterly earnings call. 

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Being an insurance company you would think that its revenue would have taken a hit, but Anthem has said the pandemic hasn’t affected its operating performance. The recent earnings also topped analysts’ predictions, posting a revenue of $29.4 billion, a 21% increase from the same time last year. As for its members, medical enrollment jumped by 3.2% year-on-year and reached 42.1 million members for the quarter.

The business will likely record large expenses relating to the coronavirus testing which could shake the business this year. Also, Anthem is waiving cost-sharing for telehealth services and phone visits. Even so, Anthem is confident that the diversity of its business will mean it continues to strengthen in the foreseeable future. 

Humana

This health insurance company’s stock has seen a jump of almost 10% in 2020 as it focuses on its telehealth services. Humana (NYSE: HUM) recorded 404,800 new members in its first-quarter earnings call and an increase of 20% in its sales to $16.76 billion. Overall, the company’s revenues were up $3 billion at the same time last year which is a good sign Humana is going in the right direction.

The CEO, Bruce Brousard put the increase in numbers down to the growing demand of its telehealth services, saying people are simply concerned for their health and do not want to leave the house. Humana is also confident that this is the way of the future and that there will be a different healthcare system after the virus. 

The company has also waived all cost-sharing for in-network primary care and behavioral health for its Medicare Advantage members until the end of the year. Humana also didn’t withdraw its full year guidance like some of its competitors, with forecast earnings per share of between $18.25 and $18.75. However, there is concern that the company’s members will have to fork out increased premiums for government-backed medicare plans.


MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in companies mentioned above. Read our full disclosure policy here.

Alsha Coppolina
Alsha Coppolina
Alsha is a contributing writer to MyWallSt. Alsha’s favorite stock is Shopify because not only does she enjoy a bit of online shopping, but she believes the e-commerce solutions business is going to continue making big gains.