Teladoc Health, Inc. (NYSE:TDOC) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year’s forecasts. The analysts have sharply increased their revenue numbers, with a view that Teladoc Health will make substantially more sales than they’d previously expected. Investor sentiment seems to be improving too, with the share price up 8.3% to US$206 over the past 7 days. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.
Following the upgrade, the current consensus from Teladoc Health’s five analysts is for revenues of US$2.0b in 2021 which – if met – would reflect a substantial 126% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 21% to US$1.14. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$1.4b and losses of US$0.83 per share in 2021. So there’s been quite a change-up of views after the recent consensus updates, with the analysts significantly increasing their revenue forecasts while also expecting losses per share to increase. It looks like the revenue growth will not be achieved without incremental costs.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Teladoc Health’s growth to accelerate, with the forecast 126% 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 20% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Teladoc Health to grow faster than the wider industry.
The Bottom Line
The most important thing to note from this downgrade is that the consensus increased its forecast losses next year, suggesting all may not be well at Teladoc Health. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Teladoc Health.
Better yet, Teladoc Health is expected to break-even soon – within the next few years – according to analyst forecasts, which would be a momentous event for shareholders. You can learn more about these forecasts, for free on our platform here.
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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.