Needham analyst Ryan MacDonald has reiterated their neutral stance on TDOC stock, giving a Hold rating today.
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Ryan MacDonald has given his Hold rating due to a combination of factors related to Teladoc’s recent performance and future outlook. Despite Teladoc surpassing expectations in its second-quarter earnings, these positive results did not translate into an improved forecast for the full fiscal year. The primary concern stems from the BetterHelp segment, which is facing challenges due to heightened competition from vendors offering insurance-covered services, as opposed to BetterHelp’s cash-based model.
MacDonald notes that while Teladoc is attempting to address these issues through strategic acquisitions like Uplift, there are inherent risks associated with expanding into insurance-based offerings. The company is still in the early stages of encouraging BetterHelp therapists to adopt the insurance model, and the lower margins typical of insurance reimbursements could restrict potential profit growth. As a result, MacDonald remains cautious and prefers to wait for more definitive signs of improvement before reconsidering the rating.
In another report released today, TD Cowen also maintained a Hold rating on the stock with a $8.00 price target.