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Why You Should Retain Teladoc Health (TDOC) Stock for Now
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Teladoc Health, Inc. (TDOC - Free Report) is well poised to grow on the back of the rising demand for telehealth services and strategic partnerships. Growing membership and visits will buoy its results. Also, a change in the cash flow situation is a major positive.
Teladoc Health — with a market cap of $10.7 billion — provides virtual access to high-quality medical care and expertise. Based in Purchase, NY, it has a user-friendly interface designed to enable members and dependents to remotely access healthcare whenever and wherever an individual chooses through mobile devices, Internet, video and phone.
Courtesy of solid prospects, this Zacks Rank #3 (Hold) stock is worth holding on to at the moment.
The Zacks Consensus Estimate for Teladoc Health’s 2022 earnings per share indicates a 40.7% year-over-year rise. It has witnessed five upward estimate revisions in the past 30 days versus none in the opposite direction. The company beat earnings estimates in three of the last four quarters and missed once, with the average surprise being 47.7%.
Furthermore, the consensus mark for 2022 revenues is pegged at $2.6 billion, indicating a 27.4% year-over-year rise.
Growth Drivers
Teladoc Health recently formed a relationship with Amazon.com, Inc. (AMZN - Free Report) and launched a voice-activated general medical virtual care via Amazon Alexa. Given the fact that around 70% of smart speaker users in the country used Amazon Echo in 2020 and the number is expected to grow, the deal will offer huge upside potential for Teladoc Health.
The growing user numbers of Teladoc Health are a major positive. It projects 2022 total visits in the band of 18.5-20 million, indicating a significant jump from the 2021 level of 15.4 million. Total U.S. paid membership is expected between 54 million and 56 million members, 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 compared with the 2021 figure of 24.2 million.
The growing numbers are reflected in TDOC’s cash flow situation. Last year, net cash provided by operating activities amounted to $194 million, which improved from cash used in operations of $53.5 million a year ago. Operating cash flows remained in the positive territory for the last three quarters. Teladoc is expected to build on this momentum and not burn through cash.
Although Teladoc Health is experiencing losses, the amount is rapidly decreasing. Its 2021 loss per share of $2.73 declined from the loss of $5.36 in 2020. The company expects net loss per share within $1.40-$1.60 for 2022. Thanks to the growing market and volumes, it is expected to keep cutting losses and rapidly move closer to profits. Teladoc is targeting a $261-billion U.S. total addressable market.
Key Concerns
There are a few factors that are impeding the growth of the stock lately.
Teladoc Health had an accumulated deficit of $1,421.5 million as of Dec 31, 2021, which widened 43.2% from the 2020-end level. The figure is not likely to decrease in the short run. 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.
Cigna and UnitedHealth are investing heavily to capture significant chunks of the lucrative market. Hence, the rising competition will likely keep putting pressure on pricing in the market. Nevertheless, we believe that a systematic and strategic plan of action will drive Teladoc Health’s long-term growth.
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Why You Should Retain Teladoc Health (TDOC) Stock for Now
Teladoc Health, Inc. (TDOC - Free Report) is well poised to grow on the back of the rising demand for telehealth services and strategic partnerships. Growing membership and visits will buoy its results. Also, a change in the cash flow situation is a major positive.
Teladoc Health — with a market cap of $10.7 billion — provides virtual access to high-quality medical care and expertise. Based in Purchase, NY, it has a user-friendly interface designed to enable members and dependents to remotely access healthcare whenever and wherever an individual chooses through mobile devices, Internet, video and phone.
Courtesy of solid prospects, this Zacks Rank #3 (Hold) stock is worth holding on to at the moment.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Trend in Estimates
The Zacks Consensus Estimate for Teladoc Health’s 2022 earnings per share indicates a 40.7% year-over-year rise. It has witnessed five upward estimate revisions in the past 30 days versus none in the opposite direction. The company beat earnings estimates in three of the last four quarters and missed once, with the average surprise being 47.7%.
Teladoc Health, Inc. Price and EPS Surprise
Teladoc Health, Inc. price-eps-surprise | Teladoc Health, Inc. Quote
Furthermore, the consensus mark for 2022 revenues is pegged at $2.6 billion, indicating a 27.4% year-over-year rise.
Growth Drivers
Teladoc Health recently formed a relationship with Amazon.com, Inc. (AMZN - Free Report) and launched a voice-activated general medical virtual care via Amazon Alexa. Given the fact that around 70% of smart speaker users in the country used Amazon Echo in 2020 and the number is expected to grow, the deal will offer huge upside potential for Teladoc Health.
The growing user numbers of Teladoc Health are a major positive. It projects 2022 total visits in the band of 18.5-20 million, indicating a significant jump from the 2021 level of 15.4 million. Total U.S. paid membership is expected between 54 million and 56 million members, 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 compared with the 2021 figure of 24.2 million.
The growing numbers are reflected in TDOC’s cash flow situation. Last year, net cash provided by operating activities amounted to $194 million, which improved from cash used in operations of $53.5 million a year ago. Operating cash flows remained in the positive territory for the last three quarters. Teladoc is expected to build on this momentum and not burn through cash.
Although Teladoc Health is experiencing losses, the amount is rapidly decreasing. Its 2021 loss per share of $2.73 declined from the loss of $5.36 in 2020. The company expects net loss per share within $1.40-$1.60 for 2022. Thanks to the growing market and volumes, it is expected to keep cutting losses and rapidly move closer to profits. Teladoc is targeting a $261-billion U.S. total addressable market.
Key Concerns
There are a few factors that are impeding the growth of the stock lately.
Teladoc Health had an accumulated deficit of $1,421.5 million as of Dec 31, 2021, which widened 43.2% from the 2020-end level. The figure is not likely to decrease in the short run. 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.
Cigna and UnitedHealth are investing heavily to capture significant chunks of the lucrative market. Hence, the rising competition will likely keep putting pressure on pricing in the market. Nevertheless, we believe that a systematic and strategic plan of action will drive Teladoc Health’s long-term growth.