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Teladoc Health (TDOC) Tumbling: Is it Healthy for Your Portfolio?
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Teladoc Health, Inc. (TDOC - Free Report) shares declined 4.6% yesterday. The stock plunged 64.7% in the past year compared with 54.3% decline of the industry. The stock is still in a loss-incurring zone. But is there more to it than what meets the eye?
Image Source: Zacks Investment Research
Let’s delve deeper.
Headwinds
Teladoc has incurred significant losses in each period since its inception. Last year, it reported net loss per share of $2.73. As of Dec 31, 2021, the company had an accumulated a deficit of $1,421.5 million, which widened 43.2% from the 2020-end level. These losses and the accumulated deficit stemmed from substantial investments made by the company to acquire new clients, build its proprietary network of healthcare providers and develop its technology platform. The figure is not likely to decrease anytime soon.
Also, competition in the virtual care space is turning fierce. Companies like Cigna Corporation (CI - Free Report) and UnitedHealth Group Incorporated (UNH - Free Report) entered the space with their respective acquisitions of MDLive and AbleTo. The space also attracted the retail behemoth Amazon.com, Inc. (AMZN - Free Report) , which launched its remote care product, Amazon Care, in 2019. The rising competition will likely keep pressure on pricing in the market.
Both Cigna and UnitedHealth are investing heavily to capture significant chunks of the market.
Now let’s take a look at what the company is doing and where it is headed.
Better Future Ahead?
Even though Teladoc Health is experiencing losses, the amount of loss incurred is rapidly decreasing. Its 2021 loss declined from the loss of $5.36 per share in 2020. The company expects net loss per share to be within $1.40-$1.60 for 2022. Further, the Zacks Consensus Estimate for the 2023 bottom line is currently pegged at $1.17 per share. Its growing market and volumes are expected to keep cutting the loss and move closer to a profitable zone. Teladoc is going after a $261-billion U.S. total addressable market.
For this year, the company projects total visits in the band of 18.5-20 million, indicating a rise from the 2021 level of 15.4 million. Total U.S. paid memberships for 2022 are expected between 54 million and 56 million, suggesting growth from the 2021 level of 53.6 million. U.S. visit fee-only access is projected to be available to 24-25 million individuals for 2022 compared with the 2021 figure of 24.2 million.
Thanks to the growing numbers, its top line keeps jumping. TDOC’s revenues in 2021 surged 86% year over year to more than $2 billion. For 2022, revenues are anticipated between $2.55 billion and $2.65 billion. The consensus mark indicates that the figure can further rise to $3.2 billion in 2023.
The company is undertaking acquisitions and partnerships to speed up growth, expand its distribution capabilities, broaden its service offerings, and create a global footprint. Some of its notable acquisitions include Healthiest You, BetterHelp, Consult-a-Doctor, and AmeriDoc. The Livongo acquisition has resulted in a combination of two leading virtual healthcare companies and ultimately led to improved health outcomes and lower costs across the healthcare system. Teladoc recently formed a relationship with Amazon.com and launched a voice-activated general medical virtual care via Amazon Alexa.
In 2021, net operating cash flow amounted to $194 million, which improved from cash used in operations of $53.5 million a year ago. Teladoc is expected to build on this momentum and not burn through cash. This reflects growing strength in company’s operations.
Hence, even though it is incurring loss in the short run, it has all the equipment in its kitty to turn things around in the long run. Teladoc currently has a Zacks Rank #3 (Hold). The company has a favorable VGM Score of B. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
Image: Shutterstock
Teladoc Health (TDOC) Tumbling: Is it Healthy for Your Portfolio?
Teladoc Health, Inc. (TDOC - Free Report) shares declined 4.6% yesterday. The stock plunged 64.7% in the past year compared with 54.3% decline of the industry. The stock is still in a loss-incurring zone. But is there more to it than what meets the eye?
Image Source: Zacks Investment Research
Let’s delve deeper.
Headwinds
Teladoc has incurred significant losses in each period since its inception. Last year, it reported net loss per share of $2.73. As of Dec 31, 2021, the company had an accumulated a deficit of $1,421.5 million, which widened 43.2% from the 2020-end level. These losses and the accumulated deficit stemmed from substantial investments made by the company to acquire new clients, build its proprietary network of healthcare providers and develop its technology platform. The figure is not likely to decrease anytime soon.
Also, competition in the virtual care space is turning fierce. Companies like Cigna Corporation (CI - Free Report) and UnitedHealth Group Incorporated (UNH - Free Report) entered the space with their respective acquisitions of MDLive and AbleTo. The space also attracted the retail behemoth Amazon.com, Inc. (AMZN - Free Report) , which launched its remote care product, Amazon Care, in 2019. The rising competition will likely keep pressure on pricing in the market.
Both Cigna and UnitedHealth are investing heavily to capture significant chunks of the market.
Now let’s take a look at what the company is doing and where it is headed.
Better Future Ahead?
Even though Teladoc Health is experiencing losses, the amount of loss incurred is rapidly decreasing. Its 2021 loss declined from the loss of $5.36 per share in 2020. The company expects net loss per share to be within $1.40-$1.60 for 2022. Further, the Zacks Consensus Estimate for the 2023 bottom line is currently pegged at $1.17 per share. Its growing market and volumes are expected to keep cutting the loss and move closer to a profitable zone. Teladoc is going after a $261-billion U.S. total addressable market.
For this year, the company projects total visits in the band of 18.5-20 million, indicating a rise from the 2021 level of 15.4 million. Total U.S. paid memberships for 2022 are expected between 54 million and 56 million, suggesting growth from the 2021 level of 53.6 million. U.S. visit fee-only access is projected to be available to 24-25 million individuals for 2022 compared with the 2021 figure of 24.2 million.
Thanks to the growing numbers, its top line keeps jumping. TDOC’s revenues in 2021 surged 86% year over year to more than $2 billion. For 2022, revenues are anticipated between $2.55 billion and $2.65 billion. The consensus mark indicates that the figure can further rise to $3.2 billion in 2023.
The company is undertaking acquisitions and partnerships to speed up growth, expand its distribution capabilities, broaden its service offerings, and create a global footprint. Some of its notable acquisitions include Healthiest You, BetterHelp, Consult-a-Doctor, and AmeriDoc. The Livongo acquisition has resulted in a combination of two leading virtual healthcare companies and ultimately led to improved health outcomes and lower costs across the healthcare system. Teladoc recently formed a relationship with Amazon.com and launched a voice-activated general medical virtual care via Amazon Alexa.
In 2021, net operating cash flow amounted to $194 million, which improved from cash used in operations of $53.5 million a year ago. Teladoc is expected to build on this momentum and not burn through cash. This reflects growing strength in company’s operations.
Hence, even though it is incurring loss in the short run, it has all the equipment in its kitty to turn things around in the long run. Teladoc currently has a Zacks Rank #3 (Hold). The company has a favorable VGM Score of B. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.