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On Thursday, Truist Securities confirmed its Hold rating on Teladoc Health Inc. (NYSE:TDOC) shares, maintaining a steady price target of $10.00. The stock, currently trading at $9.54, sits within analysts’ target range of $8-14, according to InvestingPro data. With a market capitalization of $1.66 billion, Teladoc operates with a moderate debt level and maintains a healthy current ratio of 1.77. The announcement followed Teladoc’s recent partnership with Gifthealth, a private pharmacy partner for Eli Lilly (NYSE:LLY)’s LillyDirect program. This collaboration is designed to improve the availability of Zepbound (tirzepatide) for members participating in Teladoc’s Comprehensive Weight Care Program.
According to Truist Securities, the integration with LillyDirect will allow Teladoc clinicians to prescribe medications that can be filled directly through the program. The initiative is part of a larger effort to enhance the appeal and enrollment numbers for the Weight Care Program. It also aims to provide self-pay options for branded GLP-1 medications to individuals whose insurance does not cover obesity treatments.
The partnership is expected to bolster the marketability of Teladoc’s program by offering a more integrated care approach. This could be particularly significant for plan sponsors looking to offer access to these medications to their members.
Truist Securities referenced findings from their Employer Benefit Survey, published in October 2024, which indicated a slight increase in GLP-1 coverage for weight loss from 27% in 2023 to 28% in 2024. The survey also highlighted that 23% of employers were anticipated to cover at least part of GLP-1 costs for weight loss in 2025, with 19% still undecided.
The partnership between Teladoc and Gifthealth represents an effort to address the coverage gap for GLP-1 medications, offering potential benefits to Teladoc’s Comprehensive Weight Care Program and its members. While the company generates annual revenue of $2.57 billion and maintains a strong gross profit margin of 71%, InvestingPro analysis indicates the company isn’t currently profitable. However, Teladoc’s robust free cash flow yield suggests potential value for investors. Truist Securities’ reiteration of the Hold rating and $10.00 price target suggests a steady outlook for Teladoc stock following this development. For deeper insights into Teladoc’s financial health and growth prospects, including 6 additional ProTips and comprehensive valuation metrics, explore the detailed Pro Research Report available on InvestingPro.
In other recent news, Teladoc Health reported its fourth-quarter 2024 earnings, revealing a revenue of $640.5 million, which slightly exceeded the forecast of $638.5 million. However, the company’s earnings per share (EPS) came in at -0.28, missing the expected -0.23. The full-year revenue for 2024 was $2.6 billion, a decrease of 1% compared to 2023. Teladoc Health also announced a new partnership with Eli Lilly’s LillyDirect pharmacy partner, Gifthealth, to enhance its Comprehensive Weight Care Program. This collaboration aims to facilitate access to FDA-approved medication for weight management. Additionally, analysts from Stifel and Needham maintained a Hold rating on Teladoc shares, citing mixed fourth-quarter results and challenges such as the loss of a significant client and currency exchange headwinds. The company is also focusing on expanding its international business and stabilizing its BetterHelp segment. Teladoc’s guidance for 2025 suggests flat to slight revenue growth, with a focus on expanding benefit coverage and exploring new opportunities in weight management and chronic care programs.
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