Can Teladocs 14.4% Surge Continue? An Analysis of Growth Prospects and Competitive Strengths
Teladoc (TDOC) shares rallied 14.4% in the last trading session to close at $7.89. This surge can be attributed to notable volume, with a higher number of shares being traded than in a typical session. In comparison, the stock gained 1.3% over the past four weeks.
The surge in Teladoc's share price can be attributed to several factors. Firstly, Citron Research highlighted strong growth prospects following the company's Goldman Sachs presentation, where management revealed that embedding BetterHelp in employer health plans could drastically improve conversion rates. Additionally, the recent acquisition of UpLift enables insurance billing, which further boosts the company's prospects.
Citron also emphasized Teladoc's AI edge and scale as key drivers of future profitability. These factors have contributed to a positive sentiment surrounding the stock, leading to the recent surge in price.
In terms of competitive strengths, Teladoc stands out for its unmatched integration of virtual care services, global reach, and data-driven innovation. It offers a comprehensive suite of clinical services, from wellness and acute care to chronic and mental health management, through a highly scalable, secure, and API-driven platform. Its proprietary engagement science, predictive analytics, and personalized communications drive exceptional member utilization.
Looking ahead, Teladoc is expected to post a quarterly loss of $0.26 per share in its upcoming report, which represents a year-over-year change of +7.1%. Revenues are expected to be $621.69 million, down 3.2% from the year-ago quarter. While these figures are important in evaluating the potential strength of the stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Teladoc, the consensus EPS estimate for the quarter has been revised 3.4% higher over the last 30 days to the current level. A positive trend in earnings estimate revision usually translates into price appreciation. Therefore, investors should keep an eye on TDOC going forward to see if this recent jump can turn into more strength down the road.
Currently, the stock carries a Zacks Rank #3 (Hold). In addition to Teladoc, another stock in the same industry, LifeMD, Inc. (LFMD), finished the last trading session 3.1% lower at $14.3. LFMD has returned 28% over the past month. For LFMD, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.02, representing a change of +89.5% from what the company reported a year ago. LFMD currently has a Zacks Rank of #3 (Hold).
In conclusion, Teladoc's recent surge in share price can be attributed to strong growth prospects highlighted by Citron Research and the company's competitive strengths in virtual care services and data-driven innovation. While earnings and revenue growth expectations are important in evaluating the potential strength of a stock, investors should also keep an eye on trends in earnings estimate revisions to gauge the stock's future performance.
