What happened

Shares of Teladoc Health (NYSE:TDOC) were moving higher last month as the health tech company benefited from several analyst upgrades in the period. According to data from S&P Global Market Intelligence, the stock finished the month up 31%. 

As you can see from the chart below, the stock gained steadily over the course of the month.

TDOC Chart

TDOC data by YCharts.

So what

Teladoc surged on Jan. 7, climbing 12% after BTIG initiated coverage with a buy rating and a price target of $240, which represented 18% upside from the stock's closing price the day before. Analyst David Larsen noted that healthcare plans are still indicating telehealth is their biggest priority, and that the company is capable of delivering long-term organic growth of 30% to 40% due to the rise of telehealth.

A woman and her child talking to a doctor on a tablet.

Image source: Teladoc.

On Jan. 12, the company received another endorsement, from Piper Sandler, as analyst Sean Wieland gave the stock a price target of $305 and said the company's "fundamentals are attractive, and visibility is improving." The stock gained 4.2% on that news.

The following week, JPMorgan Chase called the stock a top healthcare technology pick, giving it a 3% boost. Shares then jumped on a possible short squeeze, trending with a breakout in WallStreetBets stocks even as there was no news on Teladoc. The elevated trading volume indicated that a squeeze may have pushed the stock higher.

Now what

Teladoc, considered a leader in the fast-growing telehealth field, has been a strong performer over the last year, with shares up 161%. The company has grown through acquisitions (including Livongo Health, which closed on October) and organic growth as it aims to penetrate a high-growth, disruptive field that has been accelerated by the COVID-19 pandemic. 

In its upcoming fourth-quarter earnings report, analysts are expecting a 141% revenue increase, though the company is still expected to lose money for its foreseeable future. With analysts seeming to realize that telehealth is a growth story beyond the pandemic, the healthcare stock could have more upside potential, especially with expectations of triple-digit revenue increases.

   

 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.