Teladoc Health: A Strong Bull Case

Nov. 10, 2019 10:58 PM ETTeladoc Health, Inc. (TDOC)14 Comments
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  • Teladoc recently reported strong Q3 2019 results that beat the top- and bottom-line estimates. Additionally, management raised its full-year 2019 guidance for revenue and visits.
  • This under-the-radar telehealth company has a strong bull case and, in my opinion, Teladoc is worthy of investment dollars even at today's price.
  • I am long Teladoc, and I plan to stay long the stock.
  • This idea was discussed in more depth with members of my private investing community, Going Long With W.G.. Get started today »

Teladoc Health's (NYSE:TDOC) stock has performed extremely well over the past few years, and 2019 has been more of the same. TDOC shares are outperforming the broader market by almost 40 percentage points over the last 11-plus months.

ChartData by YCharts

I believe that the stock still has room to run, especially if you are willing (and able) to hold on to shares for the next few years. This under-the-radar company not only has a bullish long-term story to tell, but it also has promising near-term business prospects. And Teladoc's recently reported results (and management commentary) prove it.

The Latest, A Lot To Like

On October 30, 2019, Teladoc reported Q3 2019 results that beat the top- and bottom-line estimates. The company reported an adjusted loss per share of $0.28 (beat by $0.12) on revenue of $137.97M (beat by $1.51m), which also compares favorably to the year-ago quarter.

Source: Q3 2019 Earnings Press Release

Highlights from the quarter:

  • Quarterly revenue grew by 24% YoY and total visits increased by 45% (to 928K)
  • Total U.S. Paid membership grew by 55% to 35M
  • The quarterly net loss improved from the prior-year period ($20.3M at Q3 2019 compared to $23.3M at Q3 2018), and adjusted EBITDA came in at $9M (up from $6.3M in the same period of the prior year)

There is a lot to like about Teladoc's Q3 2019 results and operating metrics, but it is important to note that management also had a great story to tell during the conference call. Additionally, management took the chance to raise its full-year 2019 guidance for two key metrics, i.e., revenue and visits, after talking up the results for the last three months.

For full-year 2019, management provided the following guidance:

  • Total revenue to be in the range of $546M-550M (increased from previously communicated
ChartData by YCharts

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This article was written by

WG Investment Research profile picture
Our President and CIO is a CPA with experience in public accounting and the financial services industry. He earned his Master of Accountancy degree in 2008 and his B.S. in Business Management in 2007. He is also a Level III CFA candidate. He has been intrigued by the market from the start. Over the years, he has learned that long-term investing is a discipline that, if followed, will help contribute to building lasting wealth. As such, most of our articles will be about the investments that we plan to hold for at least 3 to 5 years, as long as the company's story does not change. As a Seeking Alpha contributor, our main goal is to write about the companies that are key to our portfolio with the hope of promoting discussion (for or against the investment) from others within the SA community.Please visit our website for more information about W.G. Investment Research LLC.

Disclosure: I am/we are long TDOC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: This article is not a recommendation to buy or sell any stock mentioned. These are only my personal opinions. Every investor must do his/her own due diligence before making any investment decision.

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