Analyst Note| Soo Romanoff |
No-moat Teladoc raised full-year 2020 top-line and member guidance at a leading financial firm conference. The increased confidence is likely related to the better-than-anticipated integration and traction of its recent acquisition of InTouch and Livongo, although specifics for these acquired entities will not be reported separately. Further, we believe the company has continued to benefit from the macro trends related to continued mobility restrictions, potential for a new wave of shut downs, and potential extension of temporary telehealth reimbursement. Within the anticipated volume increase, we continue to view the recurring visits associated with behavioral health and diabetes (Livongo) will have the largest positive financial impact. In the investor presentation, management noted that 80% of its full-year revenue will be recurring in nature, which is a notable bump likely with the upside from the Livongo acquisition. We continue to anticipate reimbursement pressure in the near term, but the change in the new administration and associated appointments may create opportunities to accelerate changes in reimbursement policy.