We’re only a few months into 2023, but it’s fair to say that the market continues to keep investors on their toes. With days of fresh highs followed by dips back downward, the ongoing volatility may be keeping some investors on the sidelines. However, for long-term investors with a minimum buy-and-hold horizon of three to five years, this could present a golden opportunity that is just too great to pass up.
By investing in quality companies now even as the broader market continues to encounter choppy waters, you can benefit from the best market days while riding out the tough days and seeing them as opportunities to invest in wonderful businesses on sale. If you have $5,000 to invest in stocks right now, here are two companies to consider putting at least part of that amount toward in the current market.
Teladoc Health (NYSE: TDOC) isn’t delivering the mouth-watering returns that it did in the earlier days of the pandemic, but the current market apathy toward growth stocks, along with the fact that this is a company in a more mature stage of its growth story, provides some helpful context for its performance in the current environment.
The major reason that Teladoc is trading down 60% over the past year (even as the stock is up 20% from the start of 2023) goes back to the company’s unprofitability. In 2022, Teladoc reported a net loss of $13.7 billion. At first glance, that eye-popping amount might make you want to head for the hills. But as always, it’s important to look beyond the numbers and at the underlying catalysts.
In this case, Teladoc’s net loss wasn’t an operational one, but a non-cash loss, almost entirely attached to three hefty impairment charges it recorded in the 12-month period to write down its 2020 acquisition of Livongo. Meanwhile, revenue hit $2.4 billion in 2022, up 18% from 2021, and the company closed out the year with $918 million of cash on its balance sheet.
Against this financial backdrop, Teladoc is continuing to witness rapid adoption across its growing core collection of virtual care services. As of the end of 2022, more than 80 million people in the U.S. have access to Teladoc’s full-service telehealth solutions.
Meanwhile, 30% of individuals enrolled on the platform and using its chronic care segment are making use of more than one of its chronic care products — a business that was catalyzed by its purchase of Livongo a few years back, even if the company did overpay for it. Total chronic care program enrollment was up 16% year over year as of the final quarter of 2022.
Another core segment for Teladoc is its teletherapy business, BetterHelp. This segment alone saw revenue jump 30% in the final three months of 2022 compared to the same period in 2021. As a Teladoc investor, I too want to see the company move back toward profitability, a target that management has been clear remains a key priority.
However, key to that goal is Teladoc’s ability to remain competitive in an evolving healthcare landscape, a feat that the company looks well-positioned to achieve given the rapid expansion and adoption of its virtual care services. For long-term investors with a well-diversified portfolio, this healthcare stock looks like a compelling option to invest in the future of this industry at a discounted price.
Airbnb (NASDAQ: ABNB) is building a business primed for the future that not only builds upon existing patterns in the travel industry but taps into the rapidly evolving nature of this space. And the travel industry has changed drastically in many ways since the earlier days of the pandemic. Now that borders have broadly reopened, cross-border travel and urban stays are growing again, which was to be expected in a post-pandemic era.
But where the real divergence occurs from the pre-pandemic era is in the evolution of the average traveler. Many people have the ability to live and work with more location independence and freedom than ever in a day and age where hybrid, remote, and flex solutions are more and more the norm, and increasingly demanded by employees. That fact means that many travelers aren’t bound by the standard two to three weeks of vacation a year, and can instead blend work and travel together, staying in a different location for weeks if not months at a time from where they are habitually domiciled.
This multitude of shifts and changes certainly bears up in Airbnb’s recent earnings reports and comments from management. For example, in the final quarter of 2022, Airbnb reported that long-term stays (bookings of 28 days or more) were up to 21% of all stays reserved on the platform. This is compared to 2019, when just around 13% to 16% of stays booked on Airbnb were long-term stays. In total for 2022, Airbnb’s revenue of $8.4 billion was up 40% on a year-over-year basis — and a whopping 75% from 2019.
Airbnb is continually refining its offerings for both hosts and guests to continuing to build upon this momentum. Active listings hit a record high at the end of 2022 as more and more people look to host on Airbnb as a means of earning extra money. One of the recent initiatives Airbnb launched to further help hosts in their journey is Airbnb Setup, which enables new hosts to work alongside Superhosts to get their businesses up and running. In the 2022 earnings call, management said that the initiative had increased the amount of new active hosts recruited by Superhosts by over 20%.
Airbnb’s leadership in the multi-billion-dollar vacation rental market is just one aspect of its overall growth story, with a platform that draws hosts and guests with a diverse range of travel needs. The growth of its industry and Airbnb’s continued diversification of its platform would indicate a long-term trajectory in its very nascent stages, a fact that investors may do well to capitalize on in the current market.
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Rachel Warren has positions in Teladoc Health. The Motley Fool has positions in and recommends Airbnb and Teladoc Health. The Motley Fool has a disclosure policy.