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's (TDOC) BetterHelp Faces FTC Hurdle, to Pay $7.8M
Read MoreHide Full Article
Teladoc Health, Inc.’s (TDOC - Free Report) online mental health therapy business, BetterHelp, recently took a hit from the Federal Trade Commission (“FTC”). The online mental health unit is expected to be barred from sharing client data for advertising purposes with social-media companies.
The trade regulator has reached a settlement with TDOC’s BetterHelp, which requires the latter to pay $7.8 million to users to settle charges. Sharing sensitive health data with third parties for marketing and ad targeting is expected to be no longer included in BetterHelp’s business practices. It has denied any wrongdoing and is expected to continue implementing more comprehensive privacy standards.
The move on BetterHelp marks FTC’s second action against a digital health firm for alleged data sharing. Earlier this year, the FTC proposed to permanently bar GoodRx Holdings, Inc. (GDRX - Free Report) from sharing sensitive client data with third parties. It has also imposed a $1.5 million civil penalty on GoodRx, a leading prescription drug discount provider.
The proposed order on BetterHelp is expected to restrict how it can share consumer data and potentially affect its revenue growth. It is to be seen how TDOC utilizes the business to reach its growth targets as it relies significantly on BetterHelp’s performance. The company expects adjusted EBITDA for 2023 to be in the range of $275-$325 million, the mid-point of which suggests 21.7% growth from the 2022 figure of $246.5 million.
The gains recorded from the BetterHelp business in 2022 were major positives for the company, justifying its inorganic growth strategy, which was under tough scrutiny following the $6.6 billion impairment charge incurred on the Livongo acquisition.
Due to regulatory changes and growing competition, the virtual care space is rapidly changing. The space also attracted the retail behemoth Amazon.com, Inc. (AMZN - Free Report) , which launched its virtual health product Amazon Clinic last November. The Cigna Group (CI - Free Report) , a global health services company, entered the space with the acquisition of MDLive in 2021. The rising competition in the virtual care space is expected to keep pressure on pricing.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Shutterstock
Teladoc's (TDOC) BetterHelp Faces FTC Hurdle, to Pay $7.8M
Teladoc Health, Inc.’s (TDOC - Free Report) online mental health therapy business, BetterHelp, recently took a hit from the Federal Trade Commission (“FTC”). The online mental health unit is expected to be barred from sharing client data for advertising purposes with social-media companies.
The trade regulator has reached a settlement with TDOC’s BetterHelp, which requires the latter to pay $7.8 million to users to settle charges. Sharing sensitive health data with third parties for marketing and ad targeting is expected to be no longer included in BetterHelp’s business practices. It has denied any wrongdoing and is expected to continue implementing more comprehensive privacy standards.
The move on BetterHelp marks FTC’s second action against a digital health firm for alleged data sharing. Earlier this year, the FTC proposed to permanently bar GoodRx Holdings, Inc. (GDRX - Free Report) from sharing sensitive client data with third parties. It has also imposed a $1.5 million civil penalty on GoodRx, a leading prescription drug discount provider.
The proposed order on BetterHelp is expected to restrict how it can share consumer data and potentially affect its revenue growth. It is to be seen how TDOC utilizes the business to reach its growth targets as it relies significantly on BetterHelp’s performance. The company expects adjusted EBITDA for 2023 to be in the range of $275-$325 million, the mid-point of which suggests 21.7% growth from the 2022 figure of $246.5 million.
The gains recorded from the BetterHelp business in 2022 were major positives for the company, justifying its inorganic growth strategy, which was under tough scrutiny following the $6.6 billion impairment charge incurred on the Livongo acquisition.
Due to regulatory changes and growing competition, the virtual care space is rapidly changing. The space also attracted the retail behemoth Amazon.com, Inc. (AMZN - Free Report) , which launched its virtual health product Amazon Clinic last November. The Cigna Group (CI - Free Report) , a global health services company, entered the space with the acquisition of MDLive in 2021. The rising competition in the virtual care space is expected to keep pressure on pricing.