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Despite Guidance Miss, Teladoc Still Attractive

Despite Guidance Miss, Teladoc Still Attractive

Chardan Capital Markets is bullish on Teladoc Inc (NYSE: TDOC) despite the software firm guiding preliminary 2017 revenue below the Street.

Teladoc, which provides telehealth services to health plans and employers, expects 2017 revenue of $182.5 million at the midpoint, which represents a 49 percent growth rate, but is 2 percent below the Street consensus of $186 million.

Analyst Commentary

Lead analyst Steven Wardell said the 49 percent top-line growth guide for 2017 is attractive, and his channel checks show strong demand for Teladoc from buyers with Teladoc well-positioned to capture that demand.

Wardell also pointed out the company's forecast for Telehealth Visit growth of 50 percent and is impressed with the increase in utilization in 2016 of 5.4 percent (up from 4.7 percent in 2015).

“[C]oncerns about low utilization are a concern in the telehealth sector and growing utilization is a positive for Teladoc in our view,” Wardell wrote in a note.

The company also reiterated its goal of reaching cash-flow breakeven on an adjusted EVITDA basis in the fourth quarter of 2017, a potential positive catalyst for the stock.

Rating, Valuation And Stock Movement

Wardell has a Buy rating on Teladoc shares, with a price target of $24.

At last check, shares of Teladoc were up 1.81 percent at $16.85. The $24 price target represents a potential upside of 45 percent from the current levels.


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