Pharmacy Operators Creating Competition in Telehealth, Pressuring Teladoc

By Liz Moyer

Investing.com -- Teladoc got a boost during the pandemic when people were doing most everything online, including seeing the doctor.

But increasing competition is creating a crowded field. Guggenheim analysts cut their rating of Teladoc Inc (NYSE:TDOC) to sell from neutral with a price target of $25, saying adjusted earnings and revenue growth would be pressured by its exposure to the consumer segment, which contributes 40% of sales. 

Not all analysts agree. Just last week, D.A. Davidson started covering Teladoc with a buy rating and price target of $45, saying the company had “established itself” as a leader in telehealth.

Shares of Teladoc fell 8% on Wednesday and are down about 61% for the year.

Several larger competitors are casting a shadow over the primary care market. Amazon.com Inc (NASDAQ:AMZN) has a $4 billion deal to acquire One Medical, a primary care operator that offers telehealth. 

CVS Health Corp (NYSE:CVS) also wants to move into primary care, once thought to be a suitor for One Medical and now thought to be looking to buy Signify Health Inc (NYSE:SGFY).

Walmart Inc (NYSE:WMT) operates nearly two-dozen health centers in its stores, including primary care. And rival Walgreens Boots Alliance Inc (NASDAQ:WBA) put $5 billion into primary care operator VillageMD in a deal last year. 

There are also American Well Corp (NYSE:AMWL) and MDLive operating in the telehealth space. AmWell this month was chosen by CVS to operate its virtual primary care offering.

Shares of AmWell are down 22% this year.