While 2020 was a solid year for growth stocks, there were few multi-bagger stocks in Canada. However, Canadian telehealth company WELL Health Technologies (TSX:WELL) entered the TSX strong and has now expanded south of the border. WELL Health stock has been on the market now for over four years, but last year it exploded.
WELL Health stock peformance
When it comes to stock performance, WELL Health stock actually didn’t do that well compared to some other tech stocks. Shares of the stock are actually down 16% in the last year. So that means if you had invested $1,000 in WELL Health stock a year ago, it would be worth $871 today.
However, that’s in the last year. When most investors got on board with the stock was when the pandemic really started to hit the world. In that case, WELL Health stock is one of the top TSX30 stocks of the last three years.
In that time, if you had invested $1,000 three years ago, you would now have $15,333!
So the question is now, based on lower growth, what should investors do with WELL Health stock? Could you make that kind of money again?
A bit about the company
WELL Health stock is a strong company because of its growth through acquisition strategy. It’s become the largest outpatient medical clinic in the country and is on a spending spree in the United States.
In that sense, analysts aren’t a huge fan of spending a ton of money. However, these investments are clearly paying off. During the latest earnings report, WELL Health stock reported record-setting revenue. Year over year the company saw 484% growth in quarterly revenue, with a 432% year-over-year increase in virtual services revenue. Further, it achieved a positive adjusted EBITDA of $11.9 million for the third consecutive quarter.
Management maintains a strong third quarter, especially due to recent acquisitions. It believes it will achieve an annualized revenue run-rate of $400 million and adjusted EBITDA of close to $100 million!
Why the hold-up?
WELL Health stock remains down out of fear that the end of the pandemic means the end of the stock. But it’s simply untrue. There has been far too much investment, both by governments and businesses, to see it go to the wayside. Telehealth provides a cheap and safe option for those to seek care not just in cities, but also in rural communities and perhaps by those who can’t make it into the office on a regular basis.
It’s clear this is the future, and one Motley Fool investors should want to be a part of. So yes, a $1,000 investment didn’t do so well in the last year. But if you’re a long-term investor, this shouldn’t bother you as much. In fact, analysts believe WELL Health stock has an average potential upside of 71% in the next year! That would turn that same $1,000 today into $1,712. And who knows what could happen a decade from now. So now is the time to pick up this stock during its recent downturn.
