We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Teladoc Stock Near 52-Week Low: Is it Healthy Enough to Invest?
Read MoreHide Full Article
Shares of Teladoc Health, Inc. (TDOC - Free Report) have dropped 31.2% over the past three months to close at $7.19 on Monday, near its 52-week low of $6.76. Having underperformed its industry and the S&P 500, the company’s current share price seems an excellent opportunity to build a position in a renowned company - after all, you would much rather buy closer to the low than the high, right?
TDOC’s Three-Month Price Performance
Image Source: Zacks Investment Research
Let’s now take a close look at Teladoc, with an eye on where it stands after falling so much, along with what we can expect going forward.
About Teladoc
Teladoc — with a market cap of $1.3 billion — is a provider of virtual access to high-quality healthcare and expertise globally. Based in Purchase, NY, the company offers virtual medical services, including general medical, specialty medical, chronic condition management and mental health.
What’s Dragging Down TDOC Stock?
Growing competition in the virtual care space is bad for Teladoc’s pricing. The space also attracted the retail behemoth Amazon.com, which combined a virtual care clinic with One Medical, its virtual and in-person primary care organization.
The telehealth market is evolving rapidly. Although the COVID-19 pandemic initially drove a surge in demand for virtual care, this demand has shifted as restrictions eased. Experts believe that for telehealth to remain effective, it can adopt a hybrid model that integrates virtual care with traditional in-person healthcare providers. Coordinated care between these models will be essential to meet changing patient needs and ensure comprehensive healthcare delivery.
Rising expenses are hurting Teladoc, although a chunk of that is coming mostly from goodwill impairments. It has incurred significant losses in each period since its inception. As of June 30, 2024, the company had an accumulated deficit of $16.1 billion, which widened from $15.2 billion reported in 2023 end. These losses and accumulated deficits stemmed from substantial investments made by the company to acquire new clients, build its proprietary network of healthcare providers and develop its technology platform.
Annual EPS estimates for TDOC have been revised downward over the past 30 days, reflecting concerns about the company’s near-term profitability.
Image Source: Zacks Investment Research
Teladoc had cash and cash equivalents of $1.2 billion as of June 30, 2024, which declined 3.4% from the figure in 2023-end. The company does not have earnings to service its debt obligation. Net cash provided by operating activities amounted to $97.6 million in the first half of 2024, which dropped 14.6% year over year.
Long-Term Prospects to Drive TDOC Stock
Despite the headwinds, Teladoc is well-positioned to grow in the long run on the back of expanding product offerings, memberships, AI integration, business diversification and global expansions.
The company's efforts to expand its product offerings are a significant positive. Teladoc has enhanced its Primary360 service by broadening its capabilities. It also introduces new services to improve care coordination and provide in-home care options. These initiatives help drive membership growth. Given the rapid momentum seen with the Primary360 service, Teladoc is likely to introduce more products and solutions in the near future.
U.S. Integrated Care Members totaled 92.4 million as of June 30, 2024, which increased 8% from a year ago. TDOC expects the membership to grow to the 92.5-94 million range.
This June, it showcased data from two studies highlighting its predictive modeling capabilities in aiding members with type 2 diabetes to manage their blood sugar levels through its diabetes management program. Using machine learning, the company is expected to continue providing better care for its members, which will likely bring more people into its programs.
Leveraging AI allows the company to enhance digital interventions while maintaining a human touch in member interactions, resulting in better health outcomes. AI can also help the company streamline healthcare delivery and diversify the business, making it more efficient and scalable over the long term. This will allow Teladoc to reach more members with personalized guidance and support.
Beyond North America, the company operates in South America, Europe, Asia-Pacific and the Middle East. Its international business expansion will provide essential diversification benefits in the long term, especially as competition intensifies in the U.S. market. The company's extensive platform and global network offer a competitive advantage in growing its international business.
TDOC: A Value-Driven Choice?
Teladoc is trading at a discount compared to the industry average. It presents a compelling investment opportunity with its attractive forward 12-month price-to-sales ratio of 0.48X, lower than the industry average of 1.01X. The company has a Value Score of A.
In comparison, its peers like American Well Corporation (AMWL - Free Report) and Phreesia, Inc. (PHR - Free Report) are trading at 0.39X and 2.98X, respectively.
TDOC Stock Holds Promise
While Teladoc has strong long-term potential, the current market conditions and specific challenges facing the company cannot be ignored. Investors should note that rising expenses, investments to develop its technology platform and intense competition in the domestic market can keep its bottom line under pressure. But TDOC remains one of the best-positioned global virtual healthcarecompanies with favorable valuation to achieve sustainable membership growth.
Image: Shutterstock
Teladoc Stock Near 52-Week Low: Is it Healthy Enough to Invest?
Shares of Teladoc Health, Inc. (TDOC - Free Report) have dropped 31.2% over the past three months to close at $7.19 on Monday, near its 52-week low of $6.76. Having underperformed its industry and the S&P 500, the company’s current share price seems an excellent opportunity to build a position in a renowned company - after all, you would much rather buy closer to the low than the high, right?
TDOC’s Three-Month Price Performance
Let’s now take a close look at Teladoc, with an eye on where it stands after falling so much, along with what we can expect going forward.
About Teladoc
Teladoc — with a market cap of $1.3 billion — is a provider of virtual access to high-quality healthcare and expertise globally. Based in Purchase, NY, the company offers virtual medical services, including general medical, specialty medical, chronic condition management and mental health.
What’s Dragging Down TDOC Stock?
Growing competition in the virtual care space is bad for Teladoc’s pricing. The space also attracted the retail behemoth Amazon.com, which combined a virtual care clinic with One Medical, its virtual and in-person primary care organization.
The telehealth market is evolving rapidly. Although the COVID-19 pandemic initially drove a surge in demand for virtual care, this demand has shifted as restrictions eased. Experts believe that for telehealth to remain effective, it can adopt a hybrid model that integrates virtual care with traditional in-person healthcare providers. Coordinated care between these models will be essential to meet changing patient needs and ensure comprehensive healthcare delivery.
Rising expenses are hurting Teladoc, although a chunk of that is coming mostly from goodwill impairments. It has incurred significant losses in each period since its inception. As of June 30, 2024, the company had an accumulated deficit of $16.1 billion, which widened from $15.2 billion reported in 2023 end. These losses and accumulated deficits stemmed from substantial investments made by the company to acquire new clients, build its proprietary network of healthcare providers and develop its technology platform.
Annual EPS estimates for TDOC have been revised downward over the past 30 days, reflecting concerns about the company’s near-term profitability.
Teladoc had cash and cash equivalents of $1.2 billion as of June 30, 2024, which declined 3.4% from the figure in 2023-end. The company does not have earnings to service its debt obligation. Net cash provided by operating activities amounted to $97.6 million in the first half of 2024, which dropped 14.6% year over year.
Long-Term Prospects to Drive TDOC Stock
Despite the headwinds, Teladoc is well-positioned to grow in the long run on the back of expanding product offerings, memberships, AI integration, business diversification and global expansions.
The company's efforts to expand its product offerings are a significant positive. Teladoc has enhanced its Primary360 service by broadening its capabilities. It also introduces new services to improve care coordination and provide in-home care options. These initiatives help drive membership growth. Given the rapid momentum seen with the Primary360 service, Teladoc is likely to introduce more products and solutions in the near future.
U.S. Integrated Care Members totaled 92.4 million as of June 30, 2024, which increased 8% from a year ago. TDOC expects the membership to grow to the 92.5-94 million range.
This June, it showcased data from two studies highlighting its predictive modeling capabilities in aiding members with type 2 diabetes to manage their blood sugar levels through its diabetes management program. Using machine learning, the company is expected to continue providing better care for its members, which will likely bring more people into its programs.
Leveraging AI allows the company to enhance digital interventions while maintaining a human touch in member interactions, resulting in better health outcomes. AI can also help the company streamline healthcare delivery and diversify the business, making it more efficient and scalable over the long term. This will allow Teladoc to reach more members with personalized guidance and support.
Beyond North America, the company operates in South America, Europe, Asia-Pacific and the Middle East. Its international business expansion will provide essential diversification benefits in the long term, especially as competition intensifies in the U.S. market. The company's extensive platform and global network offer a competitive advantage in growing its international business.
TDOC: A Value-Driven Choice?
Teladoc is trading at a discount compared to the industry average. It presents a compelling investment opportunity with its attractive forward 12-month price-to-sales ratio of 0.48X, lower than the industry average of 1.01X. The company has a Value Score of A.
In comparison, its peers like American Well Corporation (AMWL - Free Report) and Phreesia, Inc. (PHR - Free Report) are trading at 0.39X and 2.98X, respectively.
TDOC Stock Holds Promise
While Teladoc has strong long-term potential, the current market conditions and specific challenges facing the company cannot be ignored. Investors should note that rising expenses, investments to develop its technology platform and intense competition in the domestic market can keep its bottom line under pressure. But TDOC remains one of the best-positioned global virtual healthcarecompanies with favorable valuation to achieve sustainable membership growth.
Overall, the outlook is largely neutral for TDOC shares. It currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.