In recent news, Walmart (WMT) has announced the closure of 51 health centers and the discontinuation of its virtual care services. The retail giant cited a lack of sustainable business model for the decision. This announcement came shortly after news that UnitedHealth (UNH) would also be shutting down its Optum virtual health business.
Walmart initially launched the health centers in 2019 as part of a larger effort to expand its health services offerings. There were rumors circulating during this time that Walmart may acquire Humana (HUM). In contrast, Amazon (AMZN) has been more aggressive in the health clinic business following its $3.9 billion acquisition of One Medical.
Despite the closure of the health centers, Walmart still maintains nearly 4,600 pharmacies in its stores and has been expanding their range of services. The company also operates over 200 vision centers. The lack of success with Walmart Health Centers is seen as a positive for CVS Health (CVS), which fully embraced the health center model after acquiring Aetna in 2017.
The retreat from virtual care by UnitedHealth and Walmart reflects the challenges faced by companies like Teladoc (TDOC) in the rapidly evolving healthcare industry. Investors may consider a move past 60.89 as an early entry opportunity for Walmart stock, which has found support at its 50-day moving average as it forms a flat base with a buy point of 61.66. For up-to-date information on stock market trends and trading decisions, be sure to read IBD’s The Big Picture column and join IBD Live each morning for stock tips before the market opens. Unlock IBD’s premium stock lists, tools, and analysis through IBD Digital to enhance your trading strategy.