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Teladoc in focus as vaccines pose threat to virtual care boom

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By Manojna Maddipatla and Dania Nadeem

(Reuters) – Do Americans still want to consult their doctors online or has vaccine rollouts made patients confident enough to visit hospitals? Results from Teledoc Health Inc, the largest U.S. telehealth service provider, may offer some hints on Wednesday.

Telehealth companies saw a surge in demand for their services last year as the COVID-19 pandemic resulted in patients seeking alternatives to in-person hospital visits.

Forrester analyst Arielle Trzcinski said as more Americans get vaccinated it will likely lead to decline in the usage of virtual care services.

“I’ll be watching to see any impact on Teladoc’s utilization next week, is there any plateauing or decline that we start to see,” Trzcinski said.

Graphic: COVID-19 spurs record growth in Teladoc visits, revenue – https://graphics.reuters.com/TELADOC-RESULTS/PREVIEW/xklpyyygzpg/chart.png

THE CONTEXTThe pandemic has also led to a consolidation in the market with Teladoc acquiring Livongo Health in a $18.5 billion deal last year.

Rival America Well Corp, which is set to report its first-quarter results on May 12, raised $742 million in its outsized initial public offering in September, indicating healthy demand for telehealth services.

The boom in demand for online consultations attracted investment in the space from large players like Amazon.com Inc, which in March announced the expansion of its virtual healthcare service called Amazon Care.

THEFUNDAMENTALS

** Teladoc is expected to report a 150% rise in revenue to $451.9 million when it reports first-quarter earnings on Wednesday, according to the mean estimate from 24 analysts, based on Refinitiv data.

** Refinitiv’s mean analyst estimate for Teladoc is a loss of 62 cents per share. The company reported a loss of 40 cents per share a year earlier.

Graphic: Teladoc underperforms wider market in the last 12 months – https://graphics.reuters.com/TELADOC%20HEALTH-RESULTS/TELADOC%20HEALTH-RESULTS/nmovaaajbva/Pasted%20image%201619549541880.png

WALLSTREETSENTIMENT

** The current average analyst rating on the shares is “buy”, with 8 analysts rating it “strong buy”, 11 “buy,” 10 “hold” and 1 “sell.”

** Wall Street’s median 12-month price target is $263​.

** The company’s shares have dropped about 5% so far this year.

QUARTERENDINGEPSESTIMATE ($) ACTUALEPS ($) BEAT, MET,

MISSED

DEC. 31 2020 -0.24 -3.07 MISSED

SEP. 30 2020 -0.32 -0.43 MISSED

JUN. 30 2020 -0.23 -0.23 MET

MAR. 31 2020 -0.36 -0.40 MISSED

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(Reporting by Manojna Maddipatla and Dania Nadeem in Bengaluru; Editing by Arun Koyyur)

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