Teladoc Health gains on loss of Amazon Care. These stocks are also on the rise.
The surprise news of shutting down its healthcare services business may be a loss for the e-commerce giant, but it looks like a gain for remote healthcare stocks like
(ticker: TDOC) jumped 5.5% in premarket trading on Thursday, with
Health for him and for her
(HIMS) stock up 1% and
(AMWL) 4.5% higher. The three companies offer telemedicine or other remote healthcare services, including healthcare analytics and platforms, and sell prescriptions or over-the-counter drugs online.
(ticker: AMZN) said Wednesday it would shut down Amazon Care at the end of the year just months after outlining plans to expand the service, which included both telehealth and in-person care, across the country, saying it wouldn’t work long term.
The news came weeks after the tech giant announced a deal to buy a chain of medical clinics, One Medical, for $3.9 billion. Amazon is also said to be among the bidders for home health services company Signify Health for around $8 billion.
Amazon’s immediate exit from the telehealth business could be a boon for Teladoc Health, which launched at Buy earlier in August at DA Davidson with a price target of $45. It is expected to open around $35.50 on Thursday, implying more than 25% upside.
“We believe Teladoc has established itself as the leader in telehealth, with an operational scale and comprehensive offering that enables it to deliver differentiated service to customers,” said analyst Robert Simmons.
“Covid has created unprecedented tailwinds for the market, which have turned into headwinds; we believe that we are now at stable to increasing telehealth penetration rates, and that Teladoc is well positioned to continue to lead the growth and evolution of the market,” added Simmons.
For now, it has less competition from Amazon.
Write to Jack Denton at [email protected]