On Thursday, Teladoc Health Inc. (NYSE:TDOC) shares experienced a decrease in its price target, now set at $9.00, down from the previous $15.00. The stock's rating remains at Hold.
The adjustment follows the company's second-quarter results, which, despite surpassing adjusted EBITDA expectations at $89 million against consensus estimates of $75 million, showed concerning signs in other areas.
The telehealth provider is grappling with increasing customer acquisition costs (CAC), which have contributed to a decline in Behavioral Health (BH) users and revenues. In response to these challenges, management has withdrawn its consolidated and BH guidance for both 2024 and the long term.
Amid these developments, Teladoc's new CEO is taking proactive measures to reassess and revamp the company's strategy. A significant shift is underway as Teladoc transitions its BH services to an insurance-based model, which is anticipated to improve its market position. Additionally, the company is looking to enhance its international presence.
However, the company is facing headwinds with the onboarding of Clinical Care (CC), which is expected to impact growth in the second half of the year. The delays in CC onboarding are set to exert pressure on the company's growth prospects during this period.
Despite the lowered price target, Teladoc's efforts to address its strategic challenges and expand internationally may offer a pathway to steadying its performance in the evolving telehealth industry. The company's progress will continue to be monitored closely as it implements these changes.
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