Is Teladoc a Bargain After a 96% Slide and DCF Suggesting Major Upside?

• If you are wondering whether Teladoc Health is a beaten down bargain or a value trap, you are not alone, and this is exactly the kind of stock where a clear valuation framework really matters.
• After a brutal long term slide, down roughly 96.5% over five years and still about 23.4% lower than a year ago, the shares have shown some shorter term resilience with a 2.6% gain over the last month, despite being slightly weaker in the past week.
• Recent headlines have focused on Teladoc reshaping its business and sharpening its focus on core virtual care offerings, including ongoing refinements to its chronic care and mental health platforms. At the same time, the broader telehealth space has been dealing with shifting regulation and normalization after the pandemic boom. This helps explain why sentiment and the stock price have been so volatile.
• Despite that mixed backdrop, our valuation checks suggest Teladoc scores a solid 5 out of 6 on value, pointing to meaningful upside if the market is overly pessimistic. We will unpack how different valuation methods see the stock, before finishing with a more holistic way to think about what Teladoc is really worth.

Find out why Teladoc Health's -23.4% return over the last year is lagging behind its peers.

Approach 1: Teladoc Health Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a company is worth by projecting its future cash flows and then discounting them back to today using a required rate of return. For Teladoc Health, the model uses its last twelve months Free Cash Flow of about $142.4 million as a starting point, in $.

Analysts expect Free Cash Flow to rise steadily, with projections around $203.7 million in 2026 and $221.7 million in 2027, before extending to $316.2 million by 2029. Beyond the explicit analyst horizon, Simply Wall St extrapolates cash flows out to 10 years, reaching roughly $455.5 million in 2035 as growth moderates.

When these projected cash flows are discounted back under a 2 Stage Free Cash Flow to Equity framework, the model arrives at an intrinsic value of about $24.71 per share. Compared with the current market price, this implies the stock trades at roughly a 70.7% discount. This suggests investors are pricing in a far weaker future than the cash flow path assumed here.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Teladoc Health is undervalued by 70.7%. Track this in your watchlist or portfolio, or discover 913 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Teladoc Health.

Approach 2: Teladoc Health Price vs Sales

For companies like Teladoc that are still working toward consistently strong profitability, the Price to Sales ratio is often the cleanest way to compare valuation, because revenue is less noisy than earnings and less affected by one off items or accounting choices.

In general, higher growth and lower risk justify a richer multiple, while slower growth or greater uncertainty argue for a lower, more conservative ratio. Teladoc currently trades on a Price to Sales ratio of about 0.51x, which is far below the Healthcare Services industry average of roughly 2.34x and also well under the broader peer group average of around 6.44x.

Simply Wall St’s Fair Ratio framework estimates what a reasonable Price to Sales multiple should be for Teladoc, given its growth outlook, profit profile, industry, size and risk, and arrives at about 2.05x. This approach is more tailored than a simple peer or industry comparison, because it explicitly incorporates company specific drivers rather than assuming all telehealth names deserve the same multiple. With Teladoc trading at 0.51x versus a Fair Ratio of 2.05x, the shares appear materially undervalued on this metric.

Result: UNDERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1463 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Teladoc Health Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way to connect your view of Teladoc Health’s business to the numbers behind its future and what you think the stock is worth.

A Narrative is your story about a company, translated into assumptions for future revenue, earnings and margins, which then flow into a forecast and ultimately a fair value estimate.

On Simply Wall St, millions of investors use Narratives on the Community page to quickly build or adopt these story linked forecasts, see the resulting fair value, and compare that to today’s share price to decide whether they might want to buy, hold, or sell.

Because Narratives update dynamically as new news, guidance, or earnings arrive, they stay aligned with the latest information rather than leaving you anchored to stale assumptions.

For example, one Teladoc Health Narrative on Simply Wall St might assume revenue grows steadily with margins improving toward industry levels and reach a fair value near 12 dollars, while a more cautious Narrative, focused on competitive and regulatory risks, might point closer to 7 dollars instead.

Do you think there's more to the story for Teladoc Health? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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