There is an existing digital behavioural shift underway accelerated by the pandemic. COVID has exposed a chronic shortage of medical services globally and technology will once again be the solution.
In the US, 2020 saw a massive bull run on technology and healthcare names, particularly Teladoc Health which reached an enormous valuation in February 2021 before an industry wide sell off. Teladoc is Ark Invests third largest position across their ETFs and believes there is huge upside ahead in digital health. With the >70% sell off, Ark funds continues to double down on their Teladoc position as recently as late December.
DOC has faced identical selling pressure however is in a unique position and far more attractive than US and international peers. Both on a EV/Revenue and Price/Sales basis. Its all about Customer Acquisition. DOC sells B2B2C which means better gross margins and stickier revenue.
2021 CY Revenue will arrive at c.$46-$50M growing 100% YoY. Last quarter alone showed 20% QoQ revenue growth. DOC is trading at an attractive 2.95x EV/Revenue multiple of CY 2021 Revenue at 63c.
Their partnership with AXA is further being cemented which will improve operating margins in 2022. They are essentially a duopoly in the UK Private Health Market with Babylon (Bupa). Their AXA partnership and technology can be leveraged to other European or Asian markets.
With over 200+ employees, the company is scaling fast and their Australian acquisition of GP2U and Psych2U will provide blue sky opportunities particularly in mental health which is receiving tremendous Australian government support.
Anyone who has been following their social media would notice the traction they are achieving, positive app reviews and online engagement.
As the pandemic matures, diagnostics and mental health psychiatric services will have pent up demand. Both of which Doctor Care Anywhere now support through their Internet Hospital model joining primary and secondary care.
With COVID at record levels in the UK and globally, Telehealth is here to stay and adoption to soar. I expect the industry to swing back in favour and DOC to reach all time highs in 2022 as their quarterly revenue numbers continue to shine.
