Oppenheimer Releases a Buy Rating on Teladoc

By Jason Carr

Oppenheimer analyst Mohan Naidu assigned a Buy rating to Teladoc (NYSE: TDOC) today and set a price target of $40. The company’s shares opened today at $37.10, close to its 52-week high of $37.55.

Naidu said:

“Teladoc has renewed and expanded its contract with Aetna to include behavioral, dermatology and caregiver services. The new contract gives up PMPM fees in exchange for upside in increased utilization via shared savings. We estimate a decline of $7.2M/year in PMPM fees, expected to be offset by increased visit revenues (4x current rate). Not counting new services, TDOC must drive utilization up by ~35%-40% to break even with prior contract revenues, in which management expressed confidence, as they can now market directly to members to drive utilization (were relying on Aetna). Given AET members’ low utilization (~1% vs. ~6% in overall book), we believe TDOC can drive utilization higher and benefit from the new shared- savings model. Visibility will suffer, though, due to the revenue mix shift.”

According to TipRanks.com, Naidu is a 4-star analyst with an average return of 7.7% and a 54.8% success rate. Naidu covers the Technology sector, focusing on stocks such as Quality Systems, Athenahealth, and Cerner Corp.

Currently, the analyst consensus on Teladoc is Strong Buy and the average price target is $39.71, representing a 7.0% upside.

In a report issued on September 11, Piper Jaffray also reiterated a Buy rating on the stock with a $42 price target.

Based on Teladoc’s latest earnings report for the quarter ending June 30, the company posted quarterly revenue of $44.59 million and GAAP net loss of $15.42 million. In comparison, last year the company earned revenue of $26.49 million and had a GAAP net loss of $14.88 million.

Based on the recent corporate insider activity of 25 insiders, corporate insider sentiment is negative on the stock.

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Teladoc, Inc. engages in the provision of telehealth platform, delivering healthcare anytime, and anywhere via mobile devices, the internet, video, and phone. Its physicians treat a wide range of conditions and cases from acute diagnoses, such as upper respiratory infection, urinary tract infection and sinusitis to dermatological conditions, anxiety and smoking cessation. The company was founded on June 13, 2002 by George Byron Brooks and is headquartered in Dallas, TX.