Get the Latest Investment Ideas Delivered Straight to Your Inbox.

TICKERS: TDOC

Telehealth Services Provider's Positive Q3/18 Results Reflect 'Robust Growth Rate'
Research Report

Source:

A William Blair report reviewed the firm's operational and financial numbers for the period.

In a Nov. 1 research note, Ryan Daniels, a William Blair analyst, reported that Teladoc Health Inc.'s (TDOC:NYSE) Q3/18 results reflect the "positive prerelease" and are "largely in line with consensus expectations." Teladoc is a provider of virtual health services in the U.S.

Daniels added, "We continue to view Teladoc as a strong small-cap growth investment, as we believe the telehealth industry is set for material growth over the coming years."

The analyst presented and commented on the company's quarterly figures.

Q3/18 revenue grew 62% over the prior year to $111 million, and Q3/18 adjusted EBITDA came in at $6.3 million. Both numbers beat consensus' estimates of $109.9 million and $6.1 million, respectively.

Contributing to Q3/18 revenue were $22.7 million in sales from the Advance Medical acquisition, fully under Teladoc's ownership during the quarter. The integration of that company into Teladoc "appears to be off to a solid start, with management already seeing strong client interest from both new and existing accounts," indicated Daniels.

As or sales, Teladoc's "pipeline remains robust," Daniels highlighted. Management increased full-year 2018 sales guidance to $414–416 million from $409–$412 million. They, however, left the projected adjusted EBITDA unchanged, at $12–14 million.

Regarding operational figures, Teladoc ended Q3/18 with 22.6 million U.S. paid members, an 18% increase since Q3/17. This led to a 60% jump in subscription access fee revenue, to $96.6 million, and a year-over-year (YOY) bump up in the average monthly per-member fee, to $1.08 from $1.06.

Visits in Q3/18 totaled about 641,000, reflecting a 110% YOY increase.

Teladoc ended Q3/18 with about $472 million in cash, a strong position for making further strategic acquisitions. Debt at the quarter end was about $562 million.

William Blair has an Outperform stock rating on Teladoc. "Shares currently trade at about 9 times our 2019 sales target—an expensive multiple,but an appropriate one, in our view, given the company's robust growth rate and large market potential," Daniels noted. Teladoc is currently trading at around $55.12 per share.

[NLINSERT]

Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Disclosures from William Blair, Teladoc Health Inc., Nov. 1, 2018:

William Blair or an affiliate was a manager or co-manager of a public offering of equity securities for Teladoc Health, Inc. within the prior 12 months.

William Blair or an affiliate is a market maker in the security of Teladoc Health, Inc. William Blair or an affiliate expects to receive or intends to seek compensation for investment banking services from Teladoc Health, Inc. or an affiliate within the next three months.

William Blair or an affiliate received compensation for investment banking services or non-investment-banking services from Teladoc Health, Inc. within the last 12 months.

Teladoc Health, Inc. is or was, within the last 12 months, an investment banking client of William Blair & Company and/or one or more of its affiliates.

Officers and employees of William Blair or its affiliates (other than research analysts) may have a financial interest in the securities of Teladoc Health, Inc.

Ryan Daniels attests that 1) all of the views expressed in this research report accurately reflect his/her personal views about any and all of the securities and companies covered by this report, and 2) no part of his/her compensation was, is, or will be related, directly or indirectly, to the specific recommendations or views expressed by him/her in this report. We seek to update our research as appropriate. Other than certain periodical industry reports, the majority of reports are published at irregular intervals as deemed appropriate by the research analyst.




Want to read more about Life Sciences Tools & Diagnostics and Healthcare Services investment ideas?
Get Our Streetwise Reports Newsletter Free and be the first to know!

A valid email address is required to subscribe