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Teladoc Stock Falls on Downbeat Forecast for Membership

Teladoc has added 25 million members in the past two years, according to its CEO.

Courtesy Teledoc

Shares of the virtual healthcare provider Teladoc Healt h were down 6% on Thursday, after the company indicated it expected little membership growth next year.

The company achieved an extraordinary expansion in 2020, as the Covid-19 pandemic pushed medical visits online. On Wednesday evening, Teladoc reported revenues of $383.2 million for the fourth quarter of 2020, up 145% year over year. Revenues for 2020 were $1.1 billion, up from $553.3 million in 2019.

Shares of Teladoc are up 88.3% over the past 12 months, and 27.3% so far this year.

The earnings report also said, though, that paid membership is likely to be between 52 million and 54 million in 2021. The company reported membership of 51.8 million as of the end of 2020, meaning that at the low end of that range, it would have virtually no increase this year.

In a note on Thursday, Jefferies analyst Dave Windley wrote that the company added 15.1 million members in 2020, and 13.9 million in 2019, increases that helped lift the stock over the past year and a half.

“Why the softer guide?” Windley wrote “The obvious, valid reason is that TDOC has added 29M Paid Members since 2018, +127%, and COVID probably pulled some forward out of ’21.”

In a separate note, SVB Leerink analyst Stephanie Davis said that the company’s guidance is often very conservative.

“We would caution bears about reading too much into the outlook’s nuance given TDOC’s long history of conservatism in its initial guidance, and would call out clear [management] conservatism around …membership growth,” Davis wrote.

The company’s CEO, Jason Gorevic, discussed the issue on a Wednesday conference call with investors and analysts. “We added 15 million members last year and 25 million members in the last two years,” Gorevic said. “That’s a staggering number …We’ve had to sort of refill the pipeline, if you will, after just an explosive year last year. And so we take a relatively conservative view of the membership growth given the earlier stage.”

Still, he said: “I feel very, very good about continued membership growth. And we look at it over sort of a multiyear or not a quarter-by-quarter question.”

Teladoc reported a net loss of $3.07 a share for the fourth quarter, due in part to the cost of the merger it completed in October with Livongo, a digital health firm.

In addition to its membership guidance, Teladoc said it expects revenues in 2021 of between $1.95 billion and $2 billion. Analysts expect sales of $2 billion, according to FactSet.

Write to Josh Nathan-Kazis at [email protected]

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