In this complimentary clip from The Call @ Hedgeye, Healthcare analyst Tom Tobin discusses his short position, Teladoc Health (TDOC), with Hedgeye CEO Keith McCullough following a disappointing Q4 earnings report and poor guidance for Q1 2022 (and why he’s keeping TDOC on the short side.) TDOC is down -5% to $61.92 through the morning trading session on 2/23, following the prior day’s earnings.
Tobin: “None of the good stuff is happening [with the Teladoc-Livongo merger.] What you’re seeing is a reckoning of yeah, EV/Sales (enterprise value to sales) isn’t so interesting, the TAM isn’t that big; and oh, by the way, it’s actually still really expensive.
And I think that’s what you [Keith] have been talking about with #Quad4 & cashflows… When we talk to healthcare benefits workers or brokers (or really anyone in that community), they don’t know anything about Teladoc Primary 360, which is their ‘Big, big, super special, product.’”
McCullough: “This stock could easily go to $55… When you go from being a ‘Big TAM stock’ or a ‘Big Idea stock’ with unlimited market share opportunity, in a place like colonoscopy where everyone can sell you ‘the dream,’ there’s no reference point on a multiple because your forward growth rates aren’t anywhere close to where they were prior.
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