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Should You Hold on to 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 virtual visits, growing memberships, strategic partnerships and high demand for telehealth services. The stock witnessed a 2.8% increase in share price this year.
Teladoc Health — with a market cap of $4 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.
With the effects of the pandemic declining fast, some people are moving away from the stock. However, TDOC remains a long-run bet, highlighted by its improving numbers.
The Zacks Consensus Estimate for Teladoc Health’s second-quarter 2023 earnings per share indicates no change from a year ago. The company beat earnings estimates in all the last four quarters, with the average surprise being 26%.
Furthermore, the consensus mark for second-quarter 2023 revenues is pegged at $649.5 million, indicating a 9.6% year-over-year rise. Our estimate for 2023 revenues suggests 8.2% growth from the prior-year period. Our estimate for total visits indicates a 9% rise from the 2022 level of 18.5 million and the 2021 level of 15.4 million.
We expect 2023 U.S. Integrated Care members to climb 3% year over year, while BetterHelp paying users are expected to grow 23.7%. Continuous growth in visits and memberships is making investors optimistic about the company.
There were notions that once the restrictions of the pandemic recede and physical visits return to normal levels, virtual visits will decline. However, the latest visit numbers are saying otherwise. The flexibility offered by virtual visits might be boosting demand for such services. This is helping in cases of chronic conditions. Teladoc is going after a $261 billion U.S. total addressable market. Its growing market share is expected to keep cutting losses and push the company closer to a profitable zone.
Thanks to the growing numbers, cash will keep coming. In 2021, net operating cash flow amounted to $194 million, which improved from cash used in operations of $53.5 million in 2020. Even though it faced a hiccup in the first quarter of 2022, Teladoc generated $189.3 million last year. Growing strength in the company’s operations is expected to further boost the number.
Key Concerns
There are a few factors that are holding back the stock.
Teladoc Health’s accumulated deficit is rapidly widening over the last few years. The figure is not likely to decrease in the short run. Also, competition in the virtual care space is fierce, which is expected to put pressure on the company's pricing. Investors are still worried about the impairment charges the company suffered last year. Nevertheless, we believe that a systematic and strategic plan of action is likely to drive its long-term growth.
The Zacks Consensus Estimate for Life Time Group’s 2023 earnings is pegged at 41 cents per share, indicating a massive improvement from the year-ago loss of 18 cents. Also, the consensus estimate for LTH’s revenues in 2023 suggests a 22.8% year-over-year rise.
The consensus estimate for InnovAge’s fiscal 2023 earnings has improved 7.7% in the past 30 days. The Zacks Consensus Estimate for INNV’s revenues in fiscal 2023 is pegged at $689.1 million.
The consensus mark for Establishment Labs’ 2023 earnings has improved 6.2% in the past 30 days. Furthermore, the consensus estimate for ESTA’s revenues in 2023 suggests 27.6% year-over-year growth.
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Should You Hold on to Teladoc Health (TDOC) Stock for Now?
Teladoc Health, Inc. (TDOC - Free Report) is well poised to grow on the back of virtual visits, growing memberships, strategic partnerships and high demand for telehealth services. The stock witnessed a 2.8% increase in share price this year.
Teladoc Health — with a market cap of $4 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.
With the effects of the pandemic declining fast, some people are moving away from the stock. However, TDOC remains a long-run bet, highlighted by its improving numbers.
The Zacks Consensus Estimate for Teladoc Health’s second-quarter 2023 earnings per share indicates no change from a year ago. The company beat earnings estimates in all the last four quarters, with the average surprise being 26%.
Teladoc Health, Inc. Price and EPS Surprise
Teladoc Health, Inc. price-eps-surprise | Teladoc Health, Inc. Quote
Furthermore, the consensus mark for second-quarter 2023 revenues is pegged at $649.5 million, indicating a 9.6% year-over-year rise. Our estimate for 2023 revenues suggests 8.2% growth from the prior-year period. Our estimate for total visits indicates a 9% rise from the 2022 level of 18.5 million and the 2021 level of 15.4 million.
We expect 2023 U.S. Integrated Care members to climb 3% year over year, while BetterHelp paying users are expected to grow 23.7%. Continuous growth in visits and memberships is making investors optimistic about the company.
There were notions that once the restrictions of the pandemic recede and physical visits return to normal levels, virtual visits will decline. However, the latest visit numbers are saying otherwise. The flexibility offered by virtual visits might be boosting demand for such services. This is helping in cases of chronic conditions. Teladoc is going after a $261 billion U.S. total addressable market. Its growing market share is expected to keep cutting losses and push the company closer to a profitable zone.
Thanks to the growing numbers, cash will keep coming. In 2021, net operating cash flow amounted to $194 million, which improved from cash used in operations of $53.5 million in 2020. Even though it faced a hiccup in the first quarter of 2022, Teladoc generated $189.3 million last year. Growing strength in the company’s operations is expected to further boost the number.
Key Concerns
There are a few factors that are holding back the stock.
Teladoc Health’s accumulated deficit is rapidly widening over the last few years. The figure is not likely to decrease in the short run. Also, competition in the virtual care space is fierce, which is expected to put pressure on the company's pricing. Investors are still worried about the impairment charges the company suffered last year. Nevertheless, we believe that a systematic and strategic plan of action is likely to drive its long-term growth.
Key Picks
Investors interested in the broader medical space may look at better-ranked players like Life Time Group Holdings, Inc. (LTH - Free Report) , InnovAge Holding Corp. (INNV - Free Report) and Establishment Labs Holdings Inc. (ESTA - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Life Time Group’s 2023 earnings is pegged at 41 cents per share, indicating a massive improvement from the year-ago loss of 18 cents. Also, the consensus estimate for LTH’s revenues in 2023 suggests a 22.8% year-over-year rise.
The consensus estimate for InnovAge’s fiscal 2023 earnings has improved 7.7% in the past 30 days. The Zacks Consensus Estimate for INNV’s revenues in fiscal 2023 is pegged at $689.1 million.
The consensus mark for Establishment Labs’ 2023 earnings has improved 6.2% in the past 30 days. Furthermore, the consensus estimate for ESTA’s revenues in 2023 suggests 27.6% year-over-year growth.