Telehealth Stocks Suffered Severe Growing Pains in Past Year

At the height of the pandemic, telehealth stocks became all the rage as investors concluded that virtual visits would take off since in-person consultations with a physician would be too risky.

Oh, how the mighty have fallen.

In the past year, each of the top 10 telemedicine stocks has dropped by double digits, with the two largest as measured by market cap, Teladoc Health Inc. (

TDOC, Financial) and GoodRx Holdings Inc. (GDRX, Financial), declining by 75% and 50%. Teledoc traded as high as $263 early last year, but the stock can now be had for about $73. Maybe it’s time to buy given analysts assign the company a 12-month target price of $138.

So what caused the bottom to fall out? Unwarranted exuberance gave way to reality as the pandemic eased and the Omnicron variant proved to be less severe. People who wouldn’t leave their homes when the pandemic was at its height began slowly venturing out for face-to-face meetings with health care providers.

At the peak of the pandemic, the benefits of remote care were clear. But now, everyone is trying to figure out where telehealth fits into the overall health care landscape, Fast Company’s Ruth Reader reported in a recent article.

“Telehealth has been in the crosshairs,” Adam Gale, CEO and co-founder of Klas, an organization that rates health IT companies, said on the podcast Healthcare Is Hard, hosted by venture firm LRVHealth. “Everyone had one or two solutions they went into Covid with and came out with five or six or seven.”

There’s no question that telehealth is here to stay, but it’s unlikely to be the be-all, end-all for health care delivery, as Hims & Hers Health Inc. (

HIMS, Financial) CEO Andrew Dudam once predicted. This year, it looks as though the breakthroughs are going to be coming in “on-the-ground health care.”

Caption: Shares of the two biggest telehealth stocks, Teladoc and GoodRx. have been pummeled in the past year.

For example, privately-held Carbon Health, an early virtual care provider, now has physical locations in 17 regions around the country and is getting into clinical trial research. Additionally, Amazon.com Inc.’s (

AMZN, Financial) Amazon Care, which started its virtual care platform in 2019, has opened 17 in-person clinics with Crossover Health.

The state of telehealth has been likened by some to the early days of the e-commerce industry because it allows people to get access to the care they think is best for them, according to Alex Morgan, an investor at Khosla Ventures. Telehealth isn’t a flop, he added, it’s just suffering growing pains. If that’s the case, investors may be able to find a few gems among stocks of companies that have been beaten down in the past year.