Alert: This Telehealth Stock Is Now a Bargain

Telehealth stock CloudMD Software (TSXV:DOC) is now a bargain.

| More on:
Value for money

Image source: Getty Images

CloudMD Software (TSXV:DOC), an underrated telehealth stock,  caught some attention in 2020. The stock more than tripled in value as it got swept up in the tech frenzy. However, the excitement has now faded away. DOC stock is down 53% from its all-time high in February. While the company is worth half as much, its underlying fundamentals are stronger than ever. 

Here’s why this telehealth stock could be a bargain opportunity for growth investors in the months ahead. 

CloudMD’s edge

CloudMD’s stock performance makes it clear that investors considered telehealth a “COVID trend.” In other words, they expect the demand for remote healthcare and virtual appointments to fade as the economy reopens and things normalize. 

But I disagree with this notion. Access to healthcare professionals via video and chat is simply too convenient. The digitization of medical attention is a long-term trend that was simply boosted by the pandemic, not defined by it. This means that CloudMD’s advantages in virtual diagnostics and consultations are poised to last forever with or without COVID-19.

A string of recent acquisitions, including that of VisionPros for $60 million, has positioned the company on a path to robust growth. CloudMD still looks like a key player in the digitization of the healthcare industry. That’s an opportunity worth several trillion dollars. 

Consequently, CloudMD Software should continue to grow its revenue at a triple-digit pace. There’s plenty of room to attract new users, enter new geographies and offer innovative services to enhance the experience. 


In the most recent quarter, the telehealth company delivered $15.7 million in revenue with adjusted EBITDA at a negative $0.7 million. Its annualized revenue run rate stands at over $140 million. Meanwhile, the company’s market capitalization stands at $337 million. In other words, CloudMD stock is trading at a forward price-to-revenue ratio of 2.4. That makes it considerably undervalued. 

At $1.47 a share, CloudMD is relatively cheap for any investor looking to gain exposure on the tech side and healthcare side. At the current valuation, the forward price-to-earnings multiple of 102 looks affordable. 

Bottom line

Bargains in the tech sector are rare. Investors are simply too excited about the prospects of FinTech, crypto, electric vehicles, and e-commerce right now. However, telehealth seems like a different story. Investors may have tossed these stocks in the “COVID fad” basket. That could be an opportunity. 

Robust telehealth stocks like CloudMD are severely beaten down. The company is trading for less than half its value seen earlier this year. Meanwhile, revenue continues to expand at an astonishing pace. Right now, you can buy the stock for just two times annual revenue. That’s a bargain for long-term growth investors. Don’t miss out!

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. 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, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Vishesh Raisinghani has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

More on Tech Stocks

woman data analyze
Tech Stocks

1 Stock I’d Drop From the “Magnificent 7” and 1 I’d Add

Tesla (NASDAQ:TSLA) stock is part of the Magnificent Seven, but Shopify (TSX:SHOP) is growing faster.

Read more »

close-up photo of investor Warren Buffett
Tech Stocks

3 Stocks Warren Buffett Owns That Should Be on Your List, Too

Investing in quality Warren Buffett stocks such as Mastercard can help you generate outsized gains in the upcoming decade.

Read more »

Man data analyze
Tech Stocks

Missed Out on NVIDIA? My Best Growth Stock Pick to Buy and Hold

Despite its consistently improving fundamental outlook, this Canadian growth stock has seemingly been ignored by most investors for a long…

Read more »

A worker drinks out of a mug in an office.
Tech Stocks

The Best Stocks to Invest $5,000 in Right Now

Here's why investing in blue-chip stocks such as Visa should help you deliver outsized gains in 2024 and beyond.

Read more »

Young woman sat at laptop by a window
Tech Stocks

3 Stocks I Think Every Canadian Should Own in 2024

Here's why Canadian investors should hold blue-chip stocks such as Microsoft in their equity portfolios in 2024.

Read more »

Shopping and e-commerce
Tech Stocks

Is Shopify Stock a Buy, Sell, or Hold?

Down close to 60% from all-time highs, Shopify stock trades at a significant discount to consensus price target estimates.

Read more »

Different industries to invest in
Tech Stocks

TSX Information Technology in April 2024: The Best Stocks to Buy Right Now

For investors looking for the best stocks to buy to play a surge in IT spending in 2024 and beyond,…

Read more »

four people hold happy emoji masks
Tech Stocks

Forget Side Hustles: This Blue-Chip Stock Is Your Next Income Stream

Don't waste your time (literally) on a side hustle. Instead, consider this proven blue-chip stock that's seen average growth of…

Read more »