Shares of Teladoc Health (TDOC 7.98%) surged on Thursday, jumping as much as 9.1%. As of 2:50 p.m. ET, the stock was still up 8.2%.
The catalyst that sent the digital healthcare stock higher was a bit of positive analyst commentary that saw the glass as half full.
Piper Sandler analyst Jessica Tassan has been reading the digital tea leaves and believes that Teladoc Health’s results in the second quarter will be in line with analysts’ consensus estimates, according to The Fly. Tassan analyzed downloads of the company’s Livongo Health app, which suggest the company’s chronic-care business is on track for the quarter.
The analyst also noted that Teladoc’s guidance is weighted heavily toward the second half of 2022, so investors will be watching the company’s forecast closely for the third quarter and beyond. Tassan detected a “modest acceleration” in the Livongo app downloads so far in July, which suggest the quarter could be starting out on the right foot, even though it’s still early in Q3.
Even with that as a backdrop, Tassan reiterated her overweight (buy) rating on Teladoc stock, while maintaining a $42 price target. For context, that represents potential gains for investors of 8%, compared to Wednesday’s closing price.
Teladoc’s Livongo Health system provides a novel, app-based approach to dealing with chronic health conditions, most notably diabetes. The app provides strategies and coping mechanisms that result in better patient outcomes, thereby improving the quality of life and lowering the overall cost of healthcare for its users. By providing tips, tricks, and other customized feedback, the app helps patients better manage their conditions between doctor visits.
Being labeled a pandemic play didn’t do Teladoc any favors, and its slowing growth added to investor doubts. The company is guiding for full-year growth of 21% at the midpoint of its guidance, a stark contrast to its 86% growth last year.
Tough pandemic-related comps aside, telehealth is still in its early days. As the worldwide leader in virtual care, Teladoc is well-positioned to benefit from this ongoing trend.