Teladoc Health: Not Turning The Corner Yet

 

• Teladoc Health has fallen ~50% from the highs as major competition enters the telemedicine space.
• Analysts have cut out year revenue estimates by substantial amounts.
• Despite the dip below $160, the stock still trades at a forward EV/S multiple of 10x.
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Just this year, Teladoc Health (TDOC) traded as high as $308 and as low as $130. As analysts cut revenue targets for out years, investors have reduced their appetite for the telehealth provider. My investment thesis was very negative on the stock at the higher prices going back into 2020, but my view still isn't bullish on Teladoc Health below $160 due to the tough comps this year.

Read the full article on Seeking Alpha. 

Disclosure: No position mentioned. Please review the disclaimer page for more details. 

Update - July 28

The large amount of analyst downgrades possibly created the bottom in $TDOC today. The stock was clearly far more attractive near the lows at $133 with a retest of the prior lows. The stock still isn't cheap at $150. 

-Teladoc (NYSE:TDOC) has extended its post-market losses with a decline of ~9.2% in early trading after the company drew lower price targets and a downgrade following its Q2 2021 financials on Tuesday.
-Noting that its utilization growth could be hard to replicate the expansion seen in 2020/21, Deutsche Bank analyst George Hill has cut the recommendation on Teladoc to hold from buy. The revised price target of $153 implies a premium of ~1.3% to the last close.
-“We believe Teladoc has a very good business led by a very strong management team, but that does not make TDOC a good stock,” Hill wrote estimating a 12x EV/Sales multiple for 2021 down from 15x previously to reflect among other things the changing competitive environment.
-Meanwhile, Evercore ISI analyst Elizabeth Anderson (in-line) has slashed the price target for Teladoc to $150 from $170, noting the focus on how 2022 unfolds given the “robust competitive environment, and despite the recent membership growth trajectory.”
-Stifel analyst David Grossman points out that “unanswered questions persist,” as the firm with a hold rating on Teladoc trims the price target to $165 from $195.

Update - July 27

Down 7% b/c $TDOC isn't the growth story people expected.

-Q2 GAAP EPS of -$0.86 misses by $0.32.
-Revenue of $503M (+108.7% Y/Y) beats by $3.15M.
-Adjusted Gross margin was 68.1%
-EBITDA was a loss of $27.6M

Outlook Q3 2021
-Total revenue to be in the range of $510 million to $520 million.
-Adjusted EBITDA to be in the range of $60 million to $65 million.
-Net loss per share, based on 159.8 million weighted average shares outstanding, to be between $(0.78) and $(0.68).
-Total U.S. paid membership to be in the range of 52 million to 53 million members and visit fee only access to be available to approximately 22 million individuals.
-Total visits to be between 3.4 million and 3.6 million.