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We came across a bullish thesis on Teladoc Health, Inc. (TDOC) on wallstreetbets Subreddit Page by QuantumMajestic. In this article, we will summarize the bulls’ thesis on TDOC. Teladoc Health, Inc. (TDOC)'s share was trading at $10.95 as of Dec 3rd.
A nurse in a telehealth platform talking with a patient on video call for consultation.
Teladoc (TDOC), once a leader in the telehealth space, has faced a challenging period after its rapid rise during the telehealth boom. The stock currently trades around $10.95, significantly lower than its peak of $300, with a market cap of approximately $1.8 billion. While some investors may see this as a sign of failure, others view it as an opportunity to invest at a significant discount, believing that Teladoc could be on the verge of a major comeback.
In June 2024, Teladoc appointed Chuck Divita as CEO, marking a fresh start for the company. Divita, with experience in leadership roles at Humana and a history of successfully restructuring struggling business units, has focused on cost-cutting and streamlining operations. Early signs of success in these areas have already emerged in the company’s latest reports. However, Teladoc’s financials remain a concern. The company took a $790 million goodwill impairment related to its BetterHelp division, which suffered a data privacy scandal. This impairment, though painful, clears the way for future growth. Despite a net loss of $838 million in Q2 2024, the company reported a 5% year-over-year increase in revenue, suggesting a steady upward trend in business performance.
Teladoc continues to be a dominant player in telehealth, with over 80 million members and strong partnerships with major insurers like UnitedHealthcare and CVS Health. The company’s tech platform, which integrates telehealth, mental health, and chronic condition management, stands out from competitors like Amwell, which lacks the same comprehensive service offerings. With the global telehealth market projected to reach $560 billion by 2030, Teladoc is well-positioned to capture this growth, especially with increasing patient demand for virtual care and favorable regulatory policies supporting telehealth through 2025.
At its current valuation, Teladoc trades at a low 1.5x price-to-sales ratio, significantly lower than competitors like Amwell and the healthcare sector average. This suggests the stock is undervalued, especially given its ongoing revenue growth. With goals to achieve positive EBITDA by mid-2025 and plans to expand into AI-powered personalized care tools, Teladoc’s recovery prospects look promising. Furthermore, the company’s low valuation makes it an attractive potential acquisition target for larger healthcare players.