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Teladoc is at the forefront of Digital Health Revolution, but future growth has been priced-in

By Spyros Maris (University of Glasgow); Alvaro Bernal (King’s College London);

Alan Li (University of Toronto); Marco Cantonetti (ESCP)

Click on the image to view the full report.

In our latest equity research, we examine Teladoc; a growing telehealth giant provider positioned in an emerging market that has benefited from the pandemic.

Teladoc has quickly grown investor’s interests as the pandemic led to restrictions to which Teladoc’s business offering provided valuable solutions. Stay-In-Home periods not only led to a forced change in health consultation habits, but also to the realisation of the reduction in costs offered by Teladoc’s solutions, posing attractive opportunities for insurance companies and benefiting patients.

However, is the sharp increase in Teladoc share price justified or is this merely a Covid-boom stock? Will their expected future growth justify this increase, or is the stock too high in the short term?

Our valuations determined a negative outlook for Teladoc as its current fundamentals remain fairly weak when compared to peers. Its current negative financials do not justify its actual price which is heavily based on future performance. We expect Teladoc to underperform against the market’s expectation and trade lower in the short-term as future growth has been priced-in for now. Hence, our sell recommendation.

For a deeper analysis, click here to read the full report.

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