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On Monday, Jefferies analyst Glen Santangelo revised the price target for Teladoc Health Inc. (NYSE:TDOC), a telehealth company, to $8.00 from the previous $10.00, while reaffirming a Hold rating on the stock. The adjustment comes after observing that BetterHelp, a division of Teladoc, experienced a decline in data trends by approximately 20% year-over-year in the first quarter. According to InvestingPro data, the stock is currently trading near its 52-week low of $6.61, with technical indicators suggesting oversold conditions.
Santangelo noted that despite some signs of improvement in the second half of 2024, the recent data suggests a setback in the company’s performance. The company’s revenue declined 1.26% year-over-year, with a net loss of over $1 billion in the last twelve months. Teladoc’s management had previously indicated that they expected revenue to improve throughout the fiscal year 2025. However, given the tough macroeconomic conditions and the first quarter data showing a significant decline compared to the midpoint of the first quarter guidance, which predicted a decline of around 11.25%, the analyst suggests that expectations may need to be adjusted downwards.
The report highlights the challenges faced by Teladoc in a difficult economic environment and points to a potential need for the company to reassess its growth strategy. Santangelo’s commentary underscores the uncertainty surrounding Teladoc’s future growth trajectory, leading to the decision to maintain the Hold rating.
Teladoc has been navigating a period of adjustment as it tries to align its business strategy with market realities. The lowered price target reflects Jefferies’ cautious stance on the company’s short-term prospects, with emphasis on the lack of clear visibility into Teladoc’s growth strategy moving forward. As the company grapples with these issues, investors and stakeholders will be watching closely to see how Teladoc adapts to the evolving telehealth landscape.
In other recent news, Teladoc Health Inc. reported its fourth-quarter 2024 earnings, revealing a revenue of $640.5 million, which slightly exceeded forecasts of $638.5 million. However, the company reported an earnings per share (EPS) of -0.28, falling short of the expected -0.23. For the entire year, Teladoc’s revenue was $2.6 billion, marking a 1% decline from the previous year. The company ended 2024 with $1.3 billion in cash and cash equivalents. Truist Securities maintained a Hold rating on Teladoc, with a price target of $10, following the company’s new partnership with Gifthealth to improve access to weight care medications. Stifel also reiterated a Hold rating on Teladoc, setting a $9 price target, as the company’s guidance for 2025 fell below market consensus. Needham echoed this sentiment, maintaining a Hold rating after Teladoc’s mixed fourth-quarter results and challenges in its integrated care segment. The partnership with Gifthealth aims to enhance Teladoc’s Comprehensive Weight Care Program by providing members with easier access to medications like Zepbound through Eli Lilly (NYSE:LLY)’s LillyDirect program.
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