Shares of Teladoc Health Inc (NYSE: TDOC) are in focus on Friday after a DA Davidson analyst said the beaten down telemedicine company is a “buy” at current levels.
Teladoc Health has upside to $45 a share
Robert Simmons sees upside to $45 a share in the stock that has Cathie Wood as one of its proponents. His price objective represents a 20% upside on the previous close. The analyst says:
Teladoc has established itself as the leader in telehealth, with operational scale and a complete, differentiated service to customers. It’s entry into primary care is likely to create stickier, more recurring relationships with patients.
Simmons believes the Purchase-headquartered company will be on the lookout for “tuck-in technologies” to expand the breadth of its services.
His outlook is in line with Cathie Wood who’s convinced the virtual healthcare company will emerge as one of the biggest stories in “healthcare” over the next five to ten years. The Cathie Wood stock is down nearly 60% for the year.
Why else does he like the Cathie Wood stock?
The bullish note arrives a couple weeks after Teladoc reported a wider-than-expected loss for the fiscal second quarter and lowered its future guidance.
The analyst, however, is not fazed by the weakness and dubs it expected now that the COVID restrictions have been removed. But Teladoc, he emphasised, is gaining market share and there’s potential for more moving forward.
Some regulatory barriers remain to broader adoption, but physician, patient, and regulator acceptance and comfort with telehealth are all growing. As time goes on, we expect more of this shift over to Teladoc.
With the revenue growth approaching about 20% and more importantly a positive free cash flow margin that’s growing, he sees more room to the upside in TDOC than downside.
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