Analyst Allen Lutz from Bank of America Securities reiterated a Hold rating on Teladoc (TDOC – Research Report) and decreased the price target to $8.00 from $9.50.
Allen Lutz has given his Hold rating due to a combination of factors affecting Teladoc’s current performance and future outlook. The company is experiencing a decline in monthly active users (MAUs) for its BetterHelp and Livongo services, which is impacting revenue growth. Specifically, BetterHelp’s MAUs have shown a downward trend, with a notable year-over-year decline in March, suggesting that revenue growth for the first quarter will likely be at the lower end of the company’s guidance. Similarly, Livongo’s MAUs have also decreased significantly, continuing a trend of mid-teens percentage declines over the past eleven months.
Furthermore, Teladoc’s recent initiatives, such as partnerships with Eli Lilly and Amazon, and the acquisition of Catapult Health, are still in their early stages, and their potential impact on growth remains uncertain. While Teladoc is recognized as a significant player in the digital health space, concerns about revenue and margin growth persist due to the recent weaknesses in its core services and a shift from subscription to visit fees. Consequently, Lutz maintains a cautious outlook, reiterating a Neutral rating and adjusting the price objective to $8.00, reflecting lower peer multiples.
According to TipRanks, Lutz is a 5-star analyst with an average return of 8.8% and a 61.98% success rate. Lutz covers the Healthcare sector, focusing on stocks such as Hims & Hers Health, Teladoc, and Progyny.