2024-02-21 12:16:56 ET
Summary
- While TDOC appears to achieve improved economy of scale, as observed in the expanding EBITDA profitability, it is apparent that the company is no longer recording high growth.
- The intensifying market competition has also contributed to the erosion in its membership base, with the stable ARPUs implying minimal monetization tailwinds.
- The only silver lining to TDOC's investment thesis is (likely) its ability to survive the "natural culling of small, unprofitable players," thanks to the positive Free Cash Flow generation.
- However, with TDOC missing out on the obesity/diabetes party, as LLY chooses a competitor as their telehealth partner, there appears to be minimal catalysts to its reversal.
We previously covered Teladoc (NYSE: TDOC ) in November 2023, discussing the troubling signs of declining memberships and worsening profitability on a QoQ basis in FQ3'23, with it remaining to be seen if the downtrend might persist as market competition intensified....
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For further details see:
Teladoc: Should Investors Wait For Its Uncertain Turnaround Story?