By Sam Boughedda
Teladoc (NYSE:TDOC) shares were downgraded to Market Perform from Outperform by a Cowen analyst on Tuesday.
The analyst also lowered the firm's price target on the stock to $34 per share from $58. He stated in a research note that while they have long been supporters of the role of telehealth and believe Teladoc was well positioned to benefit from the transition to telehealth, it is taking "longer than expected, particularly as companies are grappling with a potentially faltering economy."
"The outsized contribution from BetterHelp (BH) over the past couple years has reversed as other macro issues (ad cost and consumer behavior) have been greater than expected. We believe mgmt's decision not to lower 2022 guidance post-2Q leaves estimates at risk for the year. Further, we are concerned that reaching 2022 adj. EBITDA guidance through lower 4Q ad spending creates a headwind for 2023 that we believe also puts 2023 estimates at risk," added the analyst.
The analyst explained that they believe Teladoc could be challenged in achieving its 2022 adj. EBITDA guidance as it seems to depend on improving consumer sentiment and spending and a significant drop in Q4 ad spending, which they believe will be in the $40-$50M range q/q.
"We are cautious on the view that consumer sentiment (a lagging indicator) will turn quickly enough to benefit 2022, and even assuming lower 4Q ad spend, we estimate 2022 adj. EBITDA of $236M below its $240-$265M range for 2022."
Teladoc shares declined 1.7% Tuesday.