Analyst Note| Dylan Finley, CFA |
No-moat Teladoc reported mixed second-quarter results, exceeding expectations on revenue but trailing consensus on earnings per share. We are maintaining our $210 per share fair value estimate, a 35% discount to the company's share price after trading hours. Despite the easing of social restrictions and sharp decline in COVID-19 cases in the U.S. during the quarter, Teladoc reported a record number of telehealth visits--over 3 million in the U.S. and just under half a million internationally. However, long-term growth for the company hinges on its success in cross-selling services and the rollout of offerings in non-acute telehealth venues--such as primary care (Primary360) and B2B behavioral health (myStrength Complete). While these areas are relatively less commoditized in nature than acute care, the company's ultimate value proposition remains its breadth of services available to payers and self-insured employers.