, an analyst from BMO Capital, has initiated a new Hold rating on Teladoc (TDOC).
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BMO Capital’s rating is based on Teladoc’s current position as a leading provider in the telehealth and virtual mental healthcare sector, where it holds a significant market share. Despite its strong market presence, the company has faced challenges in maintaining its growth trajectory post-pandemic. Management has initiated several strategies to boost revenue, focusing on expanding its international member base and enhancing monetization efforts. While these initiatives show promise, the success of Teladoc’s stock hinges on effective execution, making it a ‘show-me’ story.
BMO Capital acknowledges the potential for Teladoc to unlock significant market opportunities due to its breadth and scale. However, the company must address challenges in its end markets, which have impacted its organic revenue. The Hold rating reflects the need for Teladoc to demonstrate tangible progress in its initiatives, such as scaling BetterHelp insurance coverage and stabilizing its U.S. cash-pay base. The valuation appears attractive at 6x ’26E EBITDA, but sustained growth and execution are crucial for a more favorable rating.
In another report released on November 7, Stifel Nicolaus also maintained a Hold rating on the stock with a $7.53 price target.