US$20.84: That's What Analysts Think Teladoc Health, Inc. (NYSE:TDOC) Is Worth After Its Latest Results
One of the biggest stories of last week was how Teladoc Health, Inc. (NYSE:TDOC) shares plunged 24% in the week since its latest yearly results, closing yesterday at US$15.64. The results look positive overall; while revenues of US$2.6b were in line with analyst predictions, statutory losses were 5.3% smaller than expected, with Teladoc Health losing US$1.34 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Teladoc Health after the latest results.
View our latest analysis for Teladoc Health
After the latest results, the 22 analysts covering Teladoc Health are now predicting revenues of US$2.68b in 2024. If met, this would reflect a credible 3.0% improvement in revenue compared to the last 12 months. Losses are expected to be contained, narrowing 18% from last year to US$1.09. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$2.77b and losses of US$1.23 per share in 2024. While the revenue estimates fell, sentiment seems to have improved, with the analysts making a favorable reduction in losses per share in particular.
The consensus price target fell 9.5% to US$20.84, with the dip in revenue estimates clearly souring sentiment, despite the forecast reduction in losses. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Teladoc Health analyst has a price target of US$28.00 per share, while the most pessimistic values it at US$16.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Teladoc Health shareholders.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Teladoc Health's revenue growth is expected to slow, with the forecast 3.0% annualised growth rate until the end of 2024 being well below the historical 35% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 11% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Teladoc Health.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Still, earnings are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Teladoc Health's future valuation.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Teladoc Health going out to 2026, and you can see them free on our platform here.
Even so, be aware that Teladoc Health is showing 2 warning signs in our investment analysis , you should know about...
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.