Last week saw the newest quarterly earnings release from Teladoc Health, Inc. (NYSE:TDOC), an important milestone in the company's journey to build a stronger business. The results don't look great, especially considering that statutory losses grew 33% toUS$0.43 per share. Revenues of US$289m did beat expectations by 2.4%, but it looks like a bit of a cold comfort. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Teladoc Health after the latest results.
Taking into account the latest results, the consensus forecast from Teladoc Health's 24 analysts is for revenues of US$1.38b in 2021, which would reflect a huge 59% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 44% to US$0.81. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$1.33b and losses of US$0.81 per share in 2021.
The consensus price target held steady at US$245despite the upgrade to revenue forecasts and ongoing losses. The analysts seems to think the business is otherwise performing roughly in line with expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Teladoc Health analyst has a price target of US$305 per share, while the most pessimistic values it at US$183. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Teladoc Health shareholders.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Teladoc Health's growth to accelerate, with the forecast 59% growth ranking favourably alongside historical growth of 44% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 19% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Teladoc Health is expected to grow much faster than its industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. The consensus price target held steady at US$245, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Teladoc Health going out to 2023, and you can see them free on our platform here..
You still need to take note of risks, for example - Teladoc Health has 1 warning sign we think you should be aware of.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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