The year-to-date growth of Teladoc stock has totaled 129.41%. Yesterday, it rose by 1.94% and closed at $192.06. In the pre-market, TDOC stock slightly declined to $191.00. Its market cap is $14.3 billion.
On the background of COVID-19 pandemic and stay-at-home orders, stocks of such companies as Zoom Video Communications Inc (NASDAQ: ZM), Peloton Interactive Inc (NASDAQ: PTON), Netflix Inc (NASDAQ: NFLX), Amazon.com Inc (NASDAQ: AMZN) were in favor. Now, the market trends are positive, with the indices seeing gains. But investors are worried about the risk of the second coronavirus wave. Therefore, they wonder which shares are a safe buy. Let us compare the stock performance of two companies involved in organizing online meetings: Zoom and Teladoc Health Inc (NYSE: TDOC).
Zoom’s Success
During the first wave of the coronavirus pandemic, the number of Zoom users soared. In April, the company recorded 300 million daily users, 50% up from the end of March. Notably, in December, this number made up just 10 million users.
Zoom capitalized on the COVID-19 outbreak. Its revenue increased by just 169% in the first quarter of 2020, to $328 million. Its stock has also been in a rally. In May, its market cap reached $46.95 billion and approached the combined market cap of the biggest seven airlines (around $55 billion).
Zoom has benefited from quarantine and lockdowns that brought students and employees to Zoom’s platform. However, there is a severe risk factor when it comes to its stock. The company relies on both massive call volume and heavy spending on advertising to acquire customers. Besides, there are privacy issues, as Zoom meetings have become targets for cybercriminals and hackers.
Why Teladoc Stock Is a Better Buy
Teladoc Health may be a better company to invest in case the second coronavirus wave takes place. Teladoc Health is a global leader in virtual care. With more than 2,400 employees, it delivers care in 175 countries and in more than 40 languages. In the first quarter of 2020, the number of online consultations with physicians on Teladoc’s platform surpassed 2 million, having doubled the number in the same period last year.
The company has also demonstrated a strong revenue growth, up 41% from last year, to $180.8 million. Compared with Zoom, Teladoc’s spending and marketing expenses are not as large, just $18 million. In addition, Teladoc’s customer base grew by 61% to 43 million paid members. Among them, 13.4% were interested in physician consultations, which represents a 230-basis-point improvement since 2019.
As for Teladoc stock, its year-to-date growth has totaled 129.41%. On April 27, Teladoc Health stock reached the all-time highest closing price of $194.89 per share.
On Wednesday, Teladoc shares rose by 1.94% and closed at $192.06. In the pre-market, TDOC stock slightly declined by 0.55% to $191.00. Its market cap is $14.3 billion.
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