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Why Should You Retain Teladoc (TDOC) in Your Portfolio?
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Teladoc, Inc. (TDOC - Free Report) is well-poised for growth on the back of its robust revenue stream and strategic initiatives.
The company even flaunts an encouraging earnings surprise history, having topped the Zacks Consensus Estimate in all the trailing four quarters, the average being 2.6%. This also reflects the company’s operational efficiency.
Its return on tangible equity — a profitability measure — stands at 179.6% against its industry's negative 18.1%.
Its revenues have been growing over the past many years on the back of membership and patient visits. The uptick is evident from its CAGR of 76% from 2014 to 2018. Furthermore, the first quarter of 2019 was the 24th consecutive period in which the number of telehealth visits grew faster than its member base.
The company has been expanding its capabilities and boosting its portfolio through accretive buyouts. Since its inception in 2002, it has completed multiple acquisitions, which have cemented its distribution capabilities, broadened its service portfolio and created a global footprint. Its acquisition strategy is centered on acquiring products, capabilities, clinical specialties, technologies and distribution channels that are highly scalable and rapidly growing. We expect all these strategic initiatives to bode well for the company.
Following better-than-expected results, the company released its 2019 guidance. For the full year, the company expects revenues between $535 million and $545 million and adjusted positive EBITDA between $25 million and $35 million. It projects total U.S. paid membership of approximately 27-29 million. Total visits are expected in the band of 3.6-3.9 million. A bullish view should instill investors’ confidence in the stock.
However, the company has incurred substantial amounts of cash since its inception and intends to continue with such investments in its business growth. In each of the last four years, the company utilized its cash flow from operations. We believe, it has a long way to go before it starts generating positive cash flow from operating activities.
Shares of this Zacks Rank #3 (Hold) company have lost 4.7% in the past year, narrower than its industry's decline of 7.2%.
WellCare Health offers managed care services to government-sponsored health care programs. The company pulled off average positive surprise of 13.52% in the preceding four quarters. It holds a Zacks Rank #2 (Buy).
Anthem operates as a health benefits company in the United States. In the last four quarters, the company delivered average beat of 4.76%. It carries a Zacks Rank of 2.
Molina Healthcare is a multi-state healthcare organization. In the trailing four quarters, the company came up with average beat of 88.17%. It sports a Zacks Rank #1 (Strong Buy).
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This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
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Why Should You Retain Teladoc (TDOC) in Your Portfolio?
Teladoc, Inc. (TDOC - Free Report) is well-poised for growth on the back of its robust revenue stream and strategic initiatives.
The company even flaunts an encouraging earnings surprise history, having topped the Zacks Consensus Estimate in all the trailing four quarters, the average being 2.6%. This also reflects the company’s operational efficiency.
Its return on tangible equity — a profitability measure — stands at 179.6% against its industry's negative 18.1%.
Its revenues have been growing over the past many years on the back of membership and patient visits. The uptick is evident from its CAGR of 76% from 2014 to 2018. Furthermore, the first quarter of 2019 was the 24th consecutive period in which the number of telehealth visits grew faster than its member base.
The company has been expanding its capabilities and boosting its portfolio through accretive buyouts. Since its inception in 2002, it has completed multiple acquisitions, which have cemented its distribution capabilities, broadened its service portfolio and created a global footprint. Its acquisition strategy is centered on acquiring products, capabilities, clinical specialties, technologies and distribution channels that are highly scalable and rapidly growing. We expect all these strategic initiatives to bode well for the company.
Following better-than-expected results, the company released its 2019 guidance. For the full year, the company expects revenues between $535 million and $545 million and adjusted positive EBITDA between $25 million and $35 million. It projects total U.S. paid membership of approximately 27-29 million. Total visits are expected in the band of 3.6-3.9 million. A bullish view should instill investors’ confidence in the stock.
However, the company has incurred substantial amounts of cash since its inception and intends to continue with such investments in its business growth. In each of the last four years, the company utilized its cash flow from operations. We believe, it has a long way to go before it starts generating positive cash flow from operating activities.
Shares of this Zacks Rank #3 (Hold) company have lost 4.7% in the past year, narrower than its industry's decline of 7.2%.
Stocks to Consider
Investors interested in the medical sector can take a look at some other better-ranked stocks like WellCare Health Plans, Inc. , Anthem, Inc. and Molina Healthcare, Inc (MOH - Free Report) . You can see the complete list of today’s Zacks #1 Rank stocks here.
WellCare Health offers managed care services to government-sponsored health care programs. The company pulled off average positive surprise of 13.52% in the preceding four quarters. It holds a Zacks Rank #2 (Buy).
Anthem operates as a health benefits company in the United States. In the last four quarters, the company delivered average beat of 4.76%. It carries a Zacks Rank of 2.
Molina Healthcare is a multi-state healthcare organization. In the trailing four quarters, the company came up with average beat of 88.17%. It sports a Zacks Rank #1 (Strong Buy).
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>