Teladoc Health Analysts Give Mixed Prognosis Following Q4 Earnings

Shares of Teladoc Health, Inc. TDOC shares are lower after the telemedicine company issued below-consensus guidance for the first quarter.

The Teladoc Analysts: Needham analyst Ryan MacDonald reiterated a Buy rating on Teladoc shares and reduced the price target from $170 to $100.

Stifel analyst David Grossman maintained a Hold rating and lowered the price target from $83 to $74.

KeyBanc Capital Markets analyst Donald Hooker reiterated an Overweight rating and took down the price target from $180 to $100.

Teladoc's Valuation Is Attractive, Needham Says: Teladoc finished fiscal year 2021 on a strong note, with revenue and adjusted EBITDA all exceeding the preannounced range, Needham analyst McDonald said.

The delay in the launch of multiple chronic care customers has made revenues and margin expansion more weighted toward the second-half, the analyst said. Teladoc management shrugged it off, saying customers are already contracted and the outlook for the year remains essentially in line with previous expectations, he said. 

"While TDOC looks to be more of a 30% growth story in FY22 with mid-teens EBITDA margins, we view TDOC's current discounted valuation of 4.3x our FY22 revenue estimate as attractive for that mix of growth and profitability," according to Needham. 

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Stifel Highlights Lack Of Growth Visibility: Stifel is more focused on the lack of growth visibility beyond 2022, analyst Grossman said.

LMSD member growth implies annual per member per month growth of over 20% to achieve management's 25%-30% revenue growth objective, the analyst said.

Behavioral, which accounts for 35% of the revenues, doubled in 2021, as the pandemic accelerated growth industrywide, he said. 

"While both are secular opportunities, we expect tailwinds/pull-forward from the pandemic to moderate next year, which combined with lower visibility from newer offerings, suggest management's growth targets may prove aggressive," Grossman said. 

Stifel said it models 2023 revenue growth below consensus/guidance.

Although the firm views the risk/reward to be favorable, it said it would prefer evidence that newer products are gaining traction to get more constructive.

Teladoc's Primary360 Revenues To Ramp Significantly, KeyBanc Says: Teladoc generated fourth-quarter organic revenue growth of about 32%, with expanding EBITDA margins, KeyBanc analyst Hooker said.

"Key to our thesis for TDOC is its virtual primary care offering (Primary360), which seems to be showing good outcomes with early clients," the analyst said.

Revenues related to Primary360 will likely ramp significantly over the next three-plus years, Hooker said. The analyst maintained his 2022 and 2023 estimates without any material changes.

The lowered price target is due to the impact of rising interest rates on SaaS valuation multiples, he added.

TDOC Price Action: Teladoc shares were down 2.55% at $63.55 midday Wednesday. 

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