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Teladoc ripen for activist intervention - Jefferies

Published 05/31/2024, 11:15 AM
Updated 05/31/2024, 11:22 AM
© Reuters.  Teladoc (TDOC)
(Updated - May 31, 2024 11:18 AM EDT)

Can Teladoc (NYSE:TDOC) be heading for an intervention by an activist investor? Analysts at Jefferies believe so.

There's no denying the telemedicine company can use a change of course - its shares are down over 96% since the pandemic highs, and have lost nearly 50% through the first half of 2024 alone.

Analysts at Jefferies, in their most recent note, reiterated their doubts in the company's current strategy.

They note that "BetterHelp growth has been disappointing," and while "Integrated Care has pillared the growth & margin expansion," they still have questions over "the LT demand for chronic and primary care services."

As such, the analysts voice their concerns that the current management appears to "believe the company has the right assets/strategy, and is just in need of operational leadership," whereas they see the need for an "overall strategic review," in order to restructure productive assets and cut unnecessary costs.

They conclude: "With leadership in transition, & the average Board tenure at 6.2 yrs, with 6 of 9 members pre-dating the Livongo trans, shares seem ripe for structural change. An activist could influence the CEO decision, claim some Board seats, & be instrumental in reshaping the strategy."

Jefferies reiterated a Hold rating on the shares, but lowered the Price Target to $10 from $14.

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