It's been a pretty great week for Teladoc Health, Inc. (NYSE:TDOC) shareholders, with its shares surging 19% to US$135 in the week since its latest yearly results. The statutory results were mixed overall, with revenues of US$553m in line with analyst forecasts, but losses of US$1.38 per share, some 4.3% larger than analysts were predicting. Following the result, analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether analysts have changed their earnings models, following these results.
Taking into account the latest results, the current consensus from Teladoc Health's 18 analysts is for revenues of US$716.2m in 2020, which would reflect a major 29% increase on its sales over the past 12 months. Statutory losses are expected to increase substantially, hitting US$1.17. per share. Yet prior to the latest earnings, analysts had been forecasting revenues of US$689.2m and losses of US$1.19 per share in 2020. So it seems there's been a definite increase in optimism about Teladoc Health's future following the latest results, with a the earnings per share forecasts in particular.
The consensus price target rose 25% to US$123, with analysts encouraged by the improved revenue outlook even though the company remains lossmaking. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Teladoc Health, with the most bullish analyst valuing it at US$150 and the most bearish at US$84.00 per share. 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.
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. We would highlight that Teladoc Health's revenue growth is expected to slow, with forecast 29% increase next year well below the historical 46%p.a. growth over the last five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 14% next year. So it's pretty clear that, while Teladoc Health's revenue growth is expected to slow, it's still expected to grow faster than the market itself.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for next year. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider market. Analysts also upgraded their price target, suggesting that analysts believe the intrinsic value of the business is likely to improve over time.
Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Teladoc Health going out to 2024, and you can see them free on our platform here..
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