Teladoc Health's Revised Outlook 'Implies More Downside' According To This Analyst

Needham downgraded Teladoc Health Inc TDOC to Hold following the company's revised FY22 outlook, which now assumes the low end of their reiterated guidance, with potential for further downside.
Teladoc maintained its previously issued FY22 revenue and adjusted EBITDA outlook.
It expected revenue of $2.4 billion - $2.5 billion and adjusted EBITDA of $240 million - $265 million. However, based on current trends in the market, Teladoc said it now expects results to be toward the lower end of said ranges.
Further downside stems from an elongating employer deal pipeline, implied churn in paid membership, and the elimination of 2H22 chronic condition enrollment upside, the analysts wrote.
According to Needham, for TDOC to outperform the low end of guidance, consumer discretionary budgets must remain strong to drive excessive utilization of the DTC BetterHelp offering.
This outcome is unlikely because of macro uncertainty, inflationary pressures, and deteriorating consumer sentiment.
The issues could continue into FY23, pushing to the sidelines until signs of better pipeline conversion, stability in paid membership, and improvement in consumer sentiment are visible.
Price Action: TDOC shares are down 18.9% at $35.08 during the market session on the last check Thursday.
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