It’s time to breakdown one of the most popular healthcare names going into 2021. Here is the breakdown on $TDOC, otherwise known as Teladoc.
Current Price: $225.75
52/Wk High: $253.00
52/Wk Low: $84.78
Market Cap: $33.5 Billion
Read below for the breakdown!
Teladoc Health ($TDOC) is the leader in virtual health care services, offering virtual visits for over 450 medical subspecialties throughout 175 countries.
Due to COVID-19, digital healthcare became a necessity and kickstarted a shift to digital within the healthcare world that many believe will continue well into the future.
Months ago Teladoc went on the acquisition front, acquiring competitor Livongo in a deal valued at $18.5 billion. At the time of the deal, Teladoc stock got crushed due to investor fears that Teladoc overpaid.
Either way, the $18.5 billion deal closed in October, and Teladoc expects Livongo to add $351 million in sales to the year’s sales totals.
Since then, the stock has been flat which could be presenting a major buying opportunity.
Management continues to be upbeat about the acquisition and noted during the announcement “This merger firmly establishes Teladoc Health at the forefront of the next-generation of healthcare,” CEO Jason Gorevic said.
Not only is Teladoc expanding, but the market is booming as well. As of 2019 the global telemedicine market was roughly $49.89 billion and is expected to hit $194.05 billion by 2023, growing at a rate of 40.4%.
Shifting into the most recent earnings report, Teladoc Health reported a miss with an EPS of $-0.43, much worse than the expected EPS consensus of $-0.32. On the otherhand, Teladoc saw plenty of growth under the hood.
Teladoc reported Q3 revenues of $288.8 million, representing a 109% increase year over year, all the while Q3 total visits increased by 206% year over year to 2.8 million visits.
As for the nine-month basis, Teladoc reported $710.6 million in revenues, representing a 79% increase year over year, while total visits skyrocketed by 163% to 7.6 million total visits.
Digging further into the numbers, Teladoc reported 51.5 million total US paid memberships, representing a 47% increase year over year.
The company went onto report a net loss of $-35.9 million for Q3, much bigger than the Q3 2019 net loss of $-20.3 million. Furthermore, GAAP gross margin declined as well to 63.3% from 68.1%.
On the flip side, EBITDA improved, landing at a loss of $-6.8 million versus the Q3 2019 level of $-10.3 million.
Teladoc management delivered Q4 guidance as well, expecting revenues of $294 million to $304 million with total visits expected to land within a range of 2.8 million to 3.0 million visits.
As for 2020 as a whole, management is expecting revenues of $1.005 billion to $1.015 billion for the year with total visits anticipated to land within a range of 10.4 million to 10.6 million.
Shifting into the balance sheet the numbers are solid.
Total Debt: $977 million
Total Liabilities: $1.218 billion
Total Assets: $3.449 billion
Cash & Short Term Inv: $1.190 billion
As for valuation, Teladoc is currently quite expensive.
Price to Sales: 38.25x
Price to Book: 8.65x
Management could improve as well, but overall leadership has done a solid job.
Return on Equity: -6.84%
Return on Assets: -4.39%
Return on Invested Capital: -4.66%
Given the numbers, the analysts are bullish with a mean price target of $244.33/share, representing an 8.42% upside.
It is also important to note that the high price target is $305.00/share, representing a 35.35% upside, while the low price target is $200.00/share, representing a -11.25% loss.
The big money is also quite involved with 57.94% of Teladoc Health being owned by institutions. Top holders include The Vanguard Group, Baillie Gifford & Company, and ARK Investment Management.
On a technical basis, Teladoc could be flashing opportunity. According to six-month charts, the MACD recently crossed back to the upside with minimal upward momentum within a range of 2.32 up to 4.92.
The six-month charts are also indicating an RSI of 66.05 and CCI of 275.54, both of which are on the high end.
In short, Teladoc Health ($TDOC) is an excellent long term pick given the expected market growth, the leadership of Teladoc, and the continued expected growth of the company.
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Disclaimer: This is not direct financial advice, simply an opinion based on independent research.