QS Research · Michael Burry's Scion Capital analyst template · 2006
Teladoc Health, Inc. (TDOC)
As of 2026-11-09 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case -3% · downside -31% · upside +23%
At $8.77 the market is pricing TDOC as a shrinking BetterHelp story even though TTM free cash flow is $262.0M (N18), the FCF yield is 16.4% (N26), EV/EBITDA is 3.6x (N24), and EV of $748.8M (N22) is below $849.9M cash (N19). But the base case at today's 0.30x EV/Sales is only about $8.52: 0.30x x $2.47B = $741M EV, plus $804.7M net cash = $1.546B equity, /182.29M shares = $8.48, or -3%; section 13's $8.52 uses the given N22 EV. Downside at 0.12x = $296.4M EV + $804.7M net cash = $1.101B /182.29M = $6.04 (-31%), and upside at 0.47x = $1.161B EV + $804.7M = $1.966B /182.29M = $10.78 (+23%). I use a rerated peer range only because dated events exist: the 2026-10-28 Q3 beat (S9), the 2026-07-29 guidance reset (S73), and the two-phase $1B 2027 convert refinancing plan (S59). The base is not +30% and the downside is worse than -25%, so this is a watch, not a long or short.
Key numbers
- Share price: $8.77
- Market cap: $1.60B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $2.47B
- EV / EBITDA (TTM): 3.6x
- Price / book: 1.23x
The 15 boxes
- ✓ 1. Long-form business notes
TDOC sells virtual care two ways: a B2B Integrated Care segment (>100 million members, ~102 million in the U.S. as of Dec 31, 2025) billed mainly on recurring PMPM/PEPM/PPPM access fees, and a D2C BetterHelp mental-health platform (nearly 35,000 licensed clinicians) billed to paying users weekly or monthly. In FY2025, 83% of consolidated revenue was access fees. The company is far larger than the FY2020 10-K's snapshot ($2.53B FY2025 revenue vs $1.09B FY2020; 17.1 million visits in 2025 vs ~10.6 million in 2020) but still GAAP-loss-making (FY2025 operating loss $263.0M, net loss $200.3M) while generating $294.4M of FY2025 operating cash flow on only $8.9M of capex. Between the two 10-Ks the portfolio is now presented as two flagship brands (Teladoc Health, BetterHelp) versus six consumer brands named in the FY2020 filing, with contract structure, seasonality and state corporate-practice-of-medicine rules as the operating constraints.
- ✓ 2. Competitive advantage
The sources show no durable competitive advantage: revenue has been flat-to-down ($2.60B FY2023, $2.57B FY2024, $2.53B FY2025), operating income was negative in every year FY2020-FY2025 (from -$248.6M to -$13.65B), and the FY2025 net loss of $200.3M is a net loss even after a $71.8M goodwill impairment charge. Positive operating cash flow ($294.4M FY2025) coexists with negative operating income while intangible amortization runs at $350.8M, so the cash figure reflects a largely non-cash cost structure, not demonstrated pricing power. Competition is named and numerous in every segment (AmWell, MDLive/Cigna, Included Health, Accolade/Transcarent, Omada, Virta, Grow Therapy, Headway, Rula, Spring Health, Talkspace, plus Amazon and health plans building in-house), and client contracts are short-notice terminable, not sticky.
- ✓ 3. 10-Q takeaways
Q3 2026 revenue fell 3% to $605.1 million, with Integrated Care up 2% ($398.5 million) offset by BetterHelp down 13% ($206.6 million) as insurance-covered BetterHelp revenue scaled to $32.1 million from $3.7 million while consumer/other fell 25%. GAAP remains a loss — Q3 2026 net loss of $26.9 million ($0.15/share) and a $28.1 million operating loss, driven mostly by $88.3 million of intangible amortization — while adjusted EBITDA rose 14% to $79.4 million and Q3 free cash flow rose to $75.9 million. Full-year 2026 guidance is $2,395–2,441 million revenue, $277–303 million adjusted EBITDA and $135–165 million free cash flow, with Q4 BetterHelp revenue guided down 18.5%–31.5%. The quarter's negatives are the 12% drop in BetterHelp paying users, a 2% drop in U.S. Integrated Care members, and goodwill of $283.2 million sitting entirely in BetterHelp.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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