Teladoc stock forecast: What’s next after a 70% decline?
The Teladoc stock market price has been steadily declining since February last year as market sentiment toward former pandemic winners has kept shifting amid expected changes in macroeconomic conditions and a fading tailwind associated with the health crisis.
Higher inflation in the US has weighed on the bond market, resulting in a sharp increase in US Treasury Yields in the past few months. Higher Treasury yields typically lead to a jump in risk premiums, which is bad news for equities and companies with weak fundamentals.
The US Federal Reserve (Fed) has hinted at the possibility that multiple interest rate hikes will take place this year, while the central bank will also be tapering its pandemic-era asset purchase program.
The combination of these changes has prompted investors to reassess their Teladoc stock prediction for this year and beyond.
In this article, we will analyse the latest Teladoc stock news along with the price action and fundamentals to outline plausible scenarios for the future.
Teladoc stock analysis: Technical view and price drivers
So far in 2022, TDOC has declined nearly 20%, while the stock is trading 67% below its 52-week high.
This decline has pushed TDOC to its lowest level since October 2019 – before the Covid-19 pandemic started.
Despite beating market expectations for its revenue growth, Teladoc Health stock has remained under selling pressure lately, as have other companies in the tech space.
In this regard, an increase in risk premiums amid an expected increase in interest rates is an influential factor for Teladoc’s valuation.
As of 1 March, Teladoc has been trading 38% below its 200-day simple moving average while its momentum readings remained neutral with the relative strength index (RSI) standing at 52 (neutral) while the moving average convergence divergence (MACD) remained in negative territory.
Will the decline slow its pace in the coming weeks? Could we expect a full-blown trend reversal in the near future? The situation remains uncertain.
Commenting on the Teladoc share price forecast, David Jones, Chief Market Strategist at Capital.com, said: “We all know that stock markets have been under pressure this year – but for Teladoc that has been going on for much longer. It is February 2021 when the price hit all-time highs, briefly trading above $300. Since then, the decline has been severe with 75% wiped off the company's valuation. it is always tempting to try and pick the bottom in a sharply falling stock like this – but what are the chances you call it right?”
Jones confirmed that for Teladoc the trend is still down. “There are rallies along the way but ultimately these have just ended up being better opportunities to sell-out before the stock plunges once more,” he said.
“At the moment from a technical point of view it would probably take strength through at least $90 to suggest this trend was changing and finally we have seen a base. For now, the risk is for further weakness and the patient investor is probably going to be happy to wait a little longer to see if Teladoc can find some stability.”
Teladoc fundamental analysis: Latest earnings
Teladoc reported its financial results covering the 2021 fiscal year on 22 February.
In 2021, Teladoc produced revenues of $2.03bn, resulting in an 86% year-on-year jump, primarily aided by higher access fees in the US and internationally. US revenues advanced 94% to $1.77bn during the period, while international revenues surged 44% at $258.68bn.
The number of visits during the year surged 38% to 15.40 million on the back of higher volumes in the United States while platform-enabled sessions jumped 96% to 4.06 million. US paid memberships ended the year 3% higher at 53.6 million.
The firm’s adjusted gross margins moved 370 basis points higher at 68% during the year while the firm’s adjusted EBITDA more than doubled at $267.84m compared to $126.84m the company reported the previous year. This resulted in a 160 basis points improvement in the firm’s adjusted EBITDA margin, which ended at 13.2%.
By the end of the period, Teladoc generated positive net cash from operating activities of $193.99m compared to $53.51m it produced the previous year.
Long-term debt ended the year at $1.23bn, while total assets ended at $17.73bn, including $14.5bn in goodwill, $1.91bn in intangible assets, and $893.48m in cash and equivalents.
Teladoc stock projections: Analyst sentiment
Is Teladoc stock a ‘buy’, ‘sell’ or ‘hold’? The consensus recommendation for Teladoc stock (as of 1 March 2022) was bullish, with 13 out of 25 analysts currently rating the stock as a ‘buy’ according to data compiled by MarketBeat.
The average TDOC stock price target stood at $124.77 a share, resulting in a potential 64% upside based on the last closing price of $75.86 (as of 28 February). The highest 12-month Teladoc share price forecast was $215, while the lowest was set at $67.
Right after the company announced its results for the fourth quarter of the 2021 fiscal year, multiple financial services companies went on to slash their price targets for TDOC.
Dylan Finley, of Morningstar, stated the following in regards to the latest quarterly report: “While member growth has stagnated since the early days of the COVID-19 pandemic, utilisation has consistently grown, with members increasing their usage of telehealth services.
“While US paid member growth remained relatively stagnant in 2021 (compared with a 40% jump in 2020), visits rose over 40% year over year in the fourth quarter, with utilisation jumping from 16% to just under 23%. Members have appeared to embrace virtual healthcare despite the return of in-office care.”
Teladoc (TDOC) stock forecast: Targets for 2022, 2025 and 2027
Algorithm-based forecasting services gave mixed price targets for the Teladoc future stock price as of 1 March.
Wallet Investor held a bearish TDOC outlook, based on an assessment of multiple technical indicators. The service predicted that the price of Teladoc stock could decline to zero by the end of December 2022. This forecast was drafted based on an analysis of the current price trend, which remained bearish at the time of writing (1 March).
Gov Capital drafted a more positive Teladoc Health stock forecast, ranging from $90.02 to $121.79 a share for December 2022. The service expected the TDOC stock could surge to an average price of $305.33 by the end of December 2023 and $873.42 by the end of December 2025. Although Gov Capital did not share price targets for 2030, its five-year Teladoc Health (TDOC) stock forecast suggested the price could hit $1,403 in March 2027.
These forecasts have been drafted by analysing the historical Teladoc Health stock market price. They should not be considered a recommendation to buy or sell the stock. Many variables could weigh on the company’s short-term and long-term performance, and actual results could deviate significantly from these predictions.
It is essential to do your own research. Your decision to trade depends on your attitude to risk, your expertise in the market, the spread of your investment portfolio and how comfortable you feel about losing money. You should never invest money that you cannot afford to lose.
FAQs
Is Teladoc a good stock to buy?
Teladoc is a company that aims to disrupt the healthcare industry through telehealth. The company grew its top-line results and trimmed operating losses in 2021.
Whether TDOC stock is a suitable investment for you depends on your opinion of the company and your investment objectives. Never invest money you cannot afford to lose. And remember that past performance is no guarantee of future success.
Why has the Teladoc stock price been going down?
The price of Teladoc stock has been declining amid a confluence of negative catalysts including an expected shift in macroeconomic conditions in the United States and upcoming changes in the Federal Reserve’s monetary policy.
Will Teladoc stock go up or down?
Views from the third-party forecasting services cited above were mixed (as of 1 March). Wallet Investor predicted that the price of Teladoc stock could decline to zero, while Gov Capital suggested that the price could rise significantly in the next five years. Note that the actual outcome could vary significantly from these predictions.
Markets in this article
