Citi analyst Daniel Grosslight maintained a Hold rating on Teladoc yesterday and set a price target of $9.50.
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Daniel Grosslight’s rating is based on a combination of factors that reflect both opportunities and challenges for Teladoc. One of the key considerations is the ongoing transition to an insurance-based model, which is still in its early stages. The company has initiated a soft launch in one state, but specific performance indicators are not yet available due to the need for proper provider network credentialing and ensuring a solid customer experience. This strategic shift aims to address the high acquisition costs and churn rates in the cash pay business, but its success remains to be seen.
Furthermore, while there is positive client feedback on new Integrated Care products, such as Wellbound and AI-enabled hospital solutions, these are not expected to significantly impact revenue until 2027. The acquisition of Catapult is slightly ahead of expectations and is anticipated to contribute to revenue growth by 2025. However, the overall macroeconomic environment, characterized by softening consumer sentiment and increased churn, poses risks. Given these mixed signals, Grosslight has opted for a Hold rating, suggesting a cautious approach until more concrete results from these initiatives are observed.
In another report released on September 23, Bank of America Securities also maintained a Hold rating on the stock with a $8.50 price target.