What is TDOC's Intrinsic value?

Teladoc Health Inc (TDOC) Intrinsic Value Analysis

Executive Summary

As of May 27, 2025, Teladoc Health Inc's estimated intrinsic value ranges from $21.24 to $21.24 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Earnings Power Value $21.24 +211.9%

Is Teladoc Health Inc (TDOC) undervalued or overvalued?

With the current market price at $6.81, the stock appears to be significantly undervalued.

Understanding Intrinsic Value

Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Teladoc Health Inc's intrinsic value, including:

  1. Earnings Power Value (EPV): Values the company based on its current earnings power, assuming no growth

Weighted Average Cost of Capital (WACC)

The cost of capital is a critical factor in valuation models, representing the required return for investors.

WACC Component Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.55 0.7
Cost of equity 6.4% 8.8%
Cost of debt 4.0% 7.0%
Tax rate 0.6% 5.0%
Debt/Equity ratio 1.29 1.29
After-tax WACC 5.0% 7.6%

Valuation Methods

3. Earnings Power Value (EPV)

EPV assesses a company's value based on its current normalized earnings power, assuming no growth.

EPV Component Value
Normalized Earnings $246M
Discount Rate (WACC) 7.6% - 5.0%
Enterprise Value $3,251M - $4,895M
Net Debt $350M
Equity Value $2,902M - $4,545M
Outstanding Shares 175M
Fair Value $17 - $26
Selected Fair Value $21.24

Key Financial Metrics

Metric Value
Market Capitalization $1194M
Enterprise Value $1543M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 11.45
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 1.29

Investment Decision Framework

To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:

  1. Forecast Certainty: DCF methods rely on long-term projections, while earnings power value focuses on current normalized earnings
  2. Business Model Alignment: Dividend models are more appropriate for mature companies with established dividend policies
  3. Historical Accuracy: How well each method has predicted fair value historically

Valuation Weight Matrix

Valuation Method Weight Weighted Value
Earnings Power Value 100% $2.12
Weighted Average 100% $21.24

Investment Conclusion

Based on our comprehensive valuation analysis, Teladoc Health Inc's weighted average intrinsic value is $21.24, which is approximately 211.9% above the current market price of $6.81.

Key investment considerations:

  • Strong projected earnings growth (-39% to -31% margin)
  • Consistent cash flow generation

Given these factors, we believe Teladoc Health Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.