Ricardo Pillai
3 min read
In This Article:
We came across a bullish thesis on Teladoc Health, Inc. on High Growth Investing’s Substack by Stefan Waldhauser. In this article, we will summarize the bulls’ thesis on TDOC. Teladoc Health, Inc.'s share was trading at $6.90 as of June 20th.
A doctor in a lab coat looking at a medical education computer screen, symbolizing digital health services.
Teladoc Health (TDOC), once a pandemic-era highflyer, has suffered a staggering 97% decline in share price from its peak, now trading at just a $2 billion enterprise value despite generating $2.6 billion in revenue and turning free cash flow positive. The downfall was driven by mismanagement, over-aggressive acquisitions, and a bloated valuation, particularly the $18 billion Livongo merger that led to a record $13 billion goodwill write-off.
Yet the company remains a digital health leader with two substantial segments: Integrated Care, serving 92 million members via employers and health plans, and BetterHelp, a direct-to-consumer mental health platform generating over $1 billion in annual revenue from 400,000+ subscribers. Despite high gross margins of around 60%, Teladoc has failed to achieve profitability, weighed down by amortization and strategic missteps.
The recent ousting of long-time CEO Jason Gorevic and the appointment of Chuck Divita mark a potential turning point. Divita brings strong healthcare CFO experience and a more cost-conscious approach, a necessary contrast to his growth-obsessed predecessor. At under 1x EV/Sales and 6x free cash flow, Teladoc’s valuation reflects deep skepticism from the market, yet also offers significant upside if the turnaround succeeds.
While the new CEO’s strategy is still to be revealed, the foundation—a vast customer base, solid digital infrastructure, and high-margin business—offers fertile ground for recovery. For now, Teladoc tops the author's watchlist as a classic fallen angel, representing potential for substantial gains if execution improves and market sentiment shifts back toward overlooked tech names beyond the current AI mania.
Previously, we covered a bullish thesis on Teladoc Health, Inc. by Market Musings in February 2025, which highlighted the contrasting performance of Teladoc’s two segments—Integrated Care’s steady growth versus BetterHelp’s sharp decline—and argued that the company’s struggles are largely concentrated in the latter. The company’s stock price has depreciated approximately 27% since our coverage. This is because BetterHelp’s performance continued to drag down overall results, reinforcing concerns about segment-specific issues. The thesis still stands as Integrated Care remains resilient, with improving profitability that may eventually outweigh BetterHelp’s impact. Stefan Waldhauser shares a similar view but emphasizes the broader turnaround potential under new leadership and the company’s undervalued fundamentals in the context of its fallen-angel status.
