Teladoc Health, Inc. (NYSE: TDOC) is a Lewisville, Texas-based telemedicine company that provides remote patient monitoring and virtual doctor visits. Byron Brooks and Michael Gorton founded the company in 2002 in Dallas, Texas, as Teladoc Medical Services, Inc. The company went public in July 2015, and its common stock trades on the New York Stock Exchange under the ticker symbol “TDOC.”
Teladoc stands out as the largest and most established player in the space with a blue chip clientele, strong brand recognition, and numerous industry awards. The company has a massive network of physicians and other clinicians (over 3,100) across 115 specialties that deliver care to its members 24/7/365. According to a report by Seeking Alpha, the company holds a 13% share of the U.S. telemedicine market.
Given Teladoc’s large scale and impressive list of clients, it’s not surprising that its revenues are also robust. In 2021, the company generated $2.032 billion in total revenue, representing year-over-year growth of 86%. However, the company only makes profits on an adjusted EBITDA basis and has consistently made losses on a GAAP basis. That explains why the company’s stock is valued at around 2.9x forward revenue, which is pricey for a growth company but not outrageous for a market leader.
Data from Fortune Business Insights suggests that the global telemedicine market will grow at a CAGR of 25.8% from 2020, reaching $396 billion by 2027. As the telemedicine industry grows, Teladoc will likely maintain its position as a top player. Nevertheless, the company faces stiff competition from other well-funded startups and established healthcare companies. This competitive landscape analysis looks at some of Teladoc’s key competitors.
Bottom Line Up Front
Teladoc is the largest and most established player in the telemedicine industry but faces stiff competition from well-funded startups and large corporations. Amwell stands out as Teladoc’s main competitor, with a similar business model and comparable financials. As the industry grows, it will be interesting to watch how these competitors fare in financials, business models, and user adoption.
List of Teladoc’s Competitors
- One Medical (1Life Healthcare Inc.)
- Walmart Health Virtual Care
- Included Health (Doctor on Demand)
Teladoc’s Growth Strategy and Business Model
Teladoc’s growth strategy involves expanding its reach through partnerships, acquisitions, and organic growth. The company has partnerships with over 4,000 hospitals and health systems, which allows it to offer services to its patients. In addition, the company has signed deals with major companies such as Walmart (WMT), Apple (AAPL), Cigna (CI), and UnitedHealthcare (UNH). These deals help Teladoc to reach more consumers and increase its top-line growth.
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The company has also been active in mergers and acquisitions, acquiring Best Doctors in 2017 for $440 million and Advance Medical in 2019 for $352 million. Other acquisitions include AmeriDOCs in 2014, BetterHelp in 2015, Consult A Doctor in 2015, Compile Inc. in 2015, and InTouch Health in January 2020. These acquisitions complement Teladoc’s core business and help the company expand its reach and services.
Teladoc primarily generates revenue on a recurring subscription basis. Through its D2C business, the company offers memberships that allow unlimited access to its services for a monthly or annual fee. The company also generates revenue per-telehealth visit from its partnerships with employers, health plans, and other organizations.
Teladoc Competitors Analysis
Despite Teladoc’s large scale and impressive list of clients, the company faces stiff competition from other well-funded startups and established healthcare companies. These companies compete for customers, mindshare, and market share. The competitive landscape for telemedicine is rapidly evolving, and Teladoc will need to continue to adapt its strategy to stay ahead of the competition.
Below is a detailed analysis of Teladoc’s main competitors:
Amwell (NYSE: AMWL), formerly American Well, is a leading telemedicine company that connects patients with doctors online. The company offers a wide range of services, including primary care, behavioral health, and chronic care management. It also strongly focuses on mental health, with over 1,000 therapists in its network. Headquartered in Boston, Amwell started its operations in 2007 and was one of the early movers in the telemedicine space.
The company has a direct-to-consumer (D2C) business model and offers its services on a subscription basis. It also generates revenue per visit from its enterprise customers, which include health plans, employers, and healthcare providers. In 2019, Amwell generated $252.8 million in revenue, up from $245.8 million in 2020. Like Teladoc, Amwell isn’t profitable, generating a net loss of $176.8 million in 2021 compared to $228.6 million in 2020.
Amwell went public in 2020 with a $100 million concurrent private placement of common stock from Google’s parent company, Alphabet. The company raised $742 million in gross proceeds from its IPO. Post-IPO, Amwell’s market cap stood at $1.19 billion as of September 3, 2022. The company focuses on product innovation and is keen on expanding its offerings through partnerships and acquisitions.
It has four acquisitions to its name, the most recent being Conversa Health in July 2021 for $160 million. Partnerships with large companies like CVS Health (CVS) and UnitedHealthcare (UNH) help Amwell to expand its reach. The company strongly focuses on the U.S. market but is also present in Canada, the U.K., and Ireland. In the U.S., it has a presence in all 50 states.
2. One Medical (1Life Healthcare Inc.)
One Medical (NASDAQ: ONEM) is a membership-based primary care provider that offers its services online and through its network of physical locations. Tom Lee founded the company in 2007, focusing on providing concierge-level primary care services. As a membership-based primary care provider, OneMedical offers its memberships monthly or annually. The company also generates revenue from the sale of pharmaceuticals and lab tests.
Although One Medical isn’t a pure play telemedicine company, it does offer a wide range of digital health services, including online doctor visits, telehealth appointments, and app-based scheduling. In July 2022, Amazon agreed to acquire the company for $18 a share, or a $3.9 billion all-cash deal. If the deal goes through, it will give Amazon a strong foothold in the healthcare space.
Before the Amazon deal, One Medical was already a publicly traded company, with a market cap of $3.39 billion as of September 3, 2022. Its revenues for 2021 came in at $623.3 million, up from $380.2 million in 2020. Like Teladoc, One Medical isn’t a profitable company. Its net loss increased from $89.421 million in 2020 to $254.641 million in 2021.
Perhaps the Amazon acquisitions will open up new opportunities for One Medical and help it become profitable. Even so, One Medical needs to focus on delivering value to its members and patients and be careful not to get lost in the Amazon juggernaut. Not being a pure play telemedicine company, it also needs to focus on its brick-and-mortar locations.
3. Walmart Health Virtual Care
Formerly known as MeMD, Walmart Health Virtual Care (WHVC) is a subsidiary of retail giant Walmart (WMT). The company offers a wide range of telehealth services, including primary care, behavioral health, and chronic care management. It also provides specialist care and urgent care services.
Walmart acquired MeMD in May 2022 and changed its name to Walmart Health Virtual Care. The move complements Walmart’s existing brick-and-mortar healthcare business, including Walmart Health Centers and Sam’s Club Pharmacies. Although Walmart doesn’t break out the financials for its WHVC business, it’s safe to say that it’s a small fraction of Walmart’s overall business.
In 2021, Walmart generated $559 billion in revenue, up from $524 billion in 2020. Its net income came in at $13.51 billion in 2021, down from $14.88 billion in 2020. Walmart is a massive company with a strong balance sheet. It has the resources to invest in WHVC and grow the business over time. As of September 3, 2022, Walmart had a market cap of $364.57 billion.
Like Teladoc, WHVC operates as a pure-play telemedicine company. However, Walmart’s vast brick-and-mortar footprint gives it a significant advantage over its pure-play telemedicine rivals. Patients can easily schedule an appointment at a Walmart Health Center or Sam’s Club Pharmacy and then see a doctor virtually.
MDLive is a Florida-based telemedicine company offering virtual primary and urgent care services. The company provides services to more than 60 million members in the United States through its partnerships with health plans, employers, and retailers. Since its founding in 2009, it has gone through several rounds, raising $198.6 million. The company’s last funding round was in September 2021, when it raised $50 million from a Private Equity round, thus valuing the company at $1 billion.
Although the company had plans to go public, Evernorth, Cigna’s (CI) healthcare services arm, completed the acquisition of MDLive in April 2021 for an undisclosed amount. Evernorth is a subsidiary of Cigna, one of the largest health insurers in the United States, with over $50 billion in annual revenue. The acquisition of MDLive will help Cigna accelerate its digital transformation and provide its customers with more convenient and affordable access to quality care.
MDLive will operate within Evernorth’s portfolio of companies as a standalone business. Evernorth’s other portfolio companies include Express Scripts, the largest pharmacy benefit manager in the United States, and Great Hill Partners, a private equity firm. These strategic assets will help MDLive grow its business and scale its operations.
Compared to Teladoc, MDLive has a more limited service offering. It doesn’t provide behavioral health or chronic care management services. However, its acquisition by Evernorth gives it a significant advantage over Teladoc in terms of resources and scale. I believe that MDLive will be a strong competitor to Teladoc in the future.
5. Included Health (Doctor on Demand)
Ground Rounds Health and Doctor on Demand combined efforts to acquire Included Health, a company focused on addressing health challenges facing the LGBTQ community. Later in 2021, the two companies merged and rebranded as Included Health. The new company offers a wide range of primary care, behavioral health, and specialist services for underserved and diverse communities.
The merger created a multi-billion-dollar telehealth company with a mission to provide quality, affordable, and accessible healthcare for all. Included Health strongly focuses on social determinants of health and is committed to addressing systemic issues that impact health outcomes. While the merger is still in its early stages, I believe that Included Health has the potential to become a significant competitor to Teladoc in the future.
Before the merger, both companies reported exemplary funding rounds with high valuations. Doctor on demand’s valuation was $821 million, whereas Ground Round was valued at $1.34 billion. With the merger, I believe that Included Health is now a company to watch out for in the telehealth space. Its focus on social determinants of health and its commitment to underserved and diverse communities set it apart from its rivals.
However, Teladoc’s size and scale give it a significant advantage over Included Health. Although included health doesn’t disclose its financials, I believe it will take time for the company to catch up to Teladoc’s revenue. If the company can successfully execute its growth strategy, I think it will emerge as a strong competitor to Teladoc in the future.
Teladoc SWOT Analysis
The following are the strengths, weaknesses, opportunities, and threats of Teladoc:
- Early mover advantage
- Strong leadership team
- Extensive provider network
- Integrated delivery platform
- Innovative product offerings
- Strong financial position
- High dependence on the North American market
- High client acquisition costs
- Intense competition
- Few of its clients make up a significant portion of its revenue
- Growing demand for telehealth services
- Expansion into new geographies and markets
- Launch of new products and services
- Partnerships and acquisitions
- Regulatory changes
- Stringent reimbursement policies
- Intense competition from well-established players
- Pricing pressure from insurance companies
- Tax changes in the United States
Teladoc Competitors Analysis (FAQs)
Question: Who is Teladoc’s biggest competitor?
Answer: Amwell is Teladoc’s biggest competitor. Amwell is a publicly-traded company that offers telehealth services to individuals, businesses, and organizations. As of September 3, 2022, Amwell had a market cap of $1.19 billion, whereas Teladoc’s market cap was $4.879 billion. Amwell has a robust provider network and an extensive portfolio of products and services.
Question: What is Teladoc’s competitive advantage?
Answer: Teladoc’s competitive advantage lies in its strong provider network, integrated delivery platform, and innovative product offerings. The company has a vast network of providers, including primary care physicians, specialists, and behavioral health professionals. Apart from its economies of scale, Teladoc’s delivery platform enables it to offer a wide range of products and services. The company’s innovative product offerings include video visits, mobile apps, and self-service tools.
Question: Who are Teladoc’s clients?
Answer: Teladoc’s clients include individuals, businesses, and organizations. The company’s diversified client base includes self-insured employers, health plans, hospitals, and government agencies. More than 50 top payers in the United States offer Teladoc’s services to their members, and more than 40% of the Fortune 500 companies are Teladoc’s clients.
This Teladoc competitor analysis shows that the company faces intense competition from well-established players such as Amwell. Although it enjoys economies of scale and a robust provider network, Teladoc needs to continue innovating its product offerings to stay ahead of the competition. The company is also facing regulatory challenges and pricing pressure from insurance companies.
Despite these challenges, I believe that Teladoc is well-positioned to compete effectively in the telehealth market. Other players in the market include One Medical (1Life Healthcare Inc.), Walmart Health Virtual Care, MDLive, and Included Health (Doctor on Demand), among others.
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