Teladoc
The stock was particularly strong in 2020 as the pandemic forced nearly all doctors' visits to go completely remote. Now, as the world is reopening, there are concerns about how much of these visits will go in-person vs continuing remote. These concerns have caused Teladoc's share price to drop by nearly 45% since mid-February. This has been in-line with weakness in many high-multiple stocks, particularly ones that benefited from the coronavirus.
Inside the Numbers
In Q4, Teladoc passed a loss of $394 million which is equivalent to a $0.27 per share loss. This exceeded analysts' expectations which were looking for a $0.25 loss. Revenue slightly exceeded forecasts at $383.3 million vs $380.4 million for 145% growth compared to Q4 2019. Total visits increased by 139% to 3.1 million.
For the full year, Teladoc posted a loss of $485.1 million on revenue of $1.09 billion. In 2021, it anticipates revenue between $1.95 billion and $2 billion with Q1 revenue between $445 million and $455 million. It also expects that expenses will be lower by $20 million due to the Livongo acquisition. Total visits should be between 12 million and 13 million with total US paid membership between 52 million and 54 million.
Stock Price Outlook
The negative reaction in Teladoc's shares to earnings is certainly puzzling. The company's results were in-line with expectations and slightly higher in terms of forecast.
For investors, the biggest key is how much of the surge in Teladoc's user numbers will remain as regular users rather than temporary adopters during the pandemic. Many see the stock as being highly overvalued given its price to sales ratio of 28 and potential for declining revenues if people return to normal behavior following the pandemic's end.
Another negative for Teladoc is the strength in long-term interest rates. This makes growth stocks less attractive. Further, Teladoc could be negatively impacted in 2021 as it will have higher comps which could result in a string of quarters with lower revenue. The company also completed a high-cost, high-profile merger with its Livongo acquisition which many believe was an overpay.
However, the bullish argument is that in the long-term, telehealth will continue to take market share and Teladoc is the largest telehealth company. Once, patients and doctors are using its platform, it will have the opportunity to sell higher-margin services. For someone who believes in the telehealth story, then a 45% drop could serve as an attractive, entry point.
