Your analysis on MAX above reminds me of $TDOC.. they had some nice run up around Q1 earnings but all the gains have been wiped out since and heading to a lower price level as we speak.
Does this also infer that something is not working within the business? TDOC has been notorious for their aggresive spending in sales and marketing even faster than the growth in revenue, implying that (1) they have negative operating leverage, and (2) they could face growth decline if they stop the ads and marketing.
TDOC could be similar. Could also have been some initial short covering, and then a fade since there aren't that many buyers out there.
My broader point was just sort of adding a potential explanation for these moves. In retail, for instance, the fact that so many institutional investors have near-live credit card data means that those no-news moves need to be respected. (It's of course *really* hard to own anything in retail outside of a few names anyway.)
In Q1 TDOC did at least add gross profit dollars beyond S&M (GP +$60M, sales + mktg +$39M). Maybe that's progress? The thing I've never been quite able to get a handle with them is BetterHelp. Is that a real business or, to your point, just a method of buying revenue via Google ads that would collapse if they pulled back on marketing? I do think that space is set to see *a lot* of competition go away, and if they could consolidate that the stock starts to look a little interesting. Really hard to think of owning at this point though.
Thanks for your thoughts. $TDOC consituttes ~1% of my portofolio which is why I keep eyes on them.
The initial run-up after ER was seen by a lot as reaction to the improvement in Non-GAAP profitability. I thought so too, altough I have always been worried about their constant expansion of costs (even when they are verbal about efforts to control costs).
On Betterhelp perhaps we need to dig deeper by comparing it with competitors in details and try to understand how well their position is. Theoritically speaking the needs for people to get mental help remotly is a real demand so the market should exist. The question is which buisness/service model will fit the best.
Back to the topic on price movement, you see $SE got pumped and dumped as well, but the later is clearly due to considerable slowdown in their gaming biz. With TDOC, there is no news available. If any, they were introducing new features to offer more integrated services and care for weight management which should add customer stickness.
It's also apparently disconnected with the tech & growth rally happened in the past week. So I can only extrapolate that this is beyond the market action and something else is happening within the company. The other possibility is that people are betting the company will have much less value with AI tech replacing remote doctors. Then this will be similar to the CHGG/FVRR story.
I actually kind of like TDOC. If it was forced to be either long or short, would definitely be long.
I've done a good amount of work on BetterHelp while researching Talkspace (TALK). And what I'm not quite sure about for the part of the industry is how viable the private competitors are, particularly in an environment where targeted marketing is much more difficult.
Do they eventually fade away, since their model is just based on acquiring customers via Google (and these days probably TikTok) and therefore they need access to continued capital? Does that in turn mean that at some point, BetterHelp leads in a "winner takes most" market, in which case that business alone can be worth something like the current enterprise value?
Those questions I haven't quite answered to my satisfaction, and I'm not 100% behind TDOC management, either. But I think it's intriguing, definitely.
Keep the ideas coming, I'm enjoying your research.
Will do - thanks so much for reading!
Your analysis on MAX above reminds me of $TDOC.. they had some nice run up around Q1 earnings but all the gains have been wiped out since and heading to a lower price level as we speak.
Does this also infer that something is not working within the business? TDOC has been notorious for their aggresive spending in sales and marketing even faster than the growth in revenue, implying that (1) they have negative operating leverage, and (2) they could face growth decline if they stop the ads and marketing.
TDOC could be similar. Could also have been some initial short covering, and then a fade since there aren't that many buyers out there.
My broader point was just sort of adding a potential explanation for these moves. In retail, for instance, the fact that so many institutional investors have near-live credit card data means that those no-news moves need to be respected. (It's of course *really* hard to own anything in retail outside of a few names anyway.)
In Q1 TDOC did at least add gross profit dollars beyond S&M (GP +$60M, sales + mktg +$39M). Maybe that's progress? The thing I've never been quite able to get a handle with them is BetterHelp. Is that a real business or, to your point, just a method of buying revenue via Google ads that would collapse if they pulled back on marketing? I do think that space is set to see *a lot* of competition go away, and if they could consolidate that the stock starts to look a little interesting. Really hard to think of owning at this point though.
Thanks for your thoughts. $TDOC consituttes ~1% of my portofolio which is why I keep eyes on them.
The initial run-up after ER was seen by a lot as reaction to the improvement in Non-GAAP profitability. I thought so too, altough I have always been worried about their constant expansion of costs (even when they are verbal about efforts to control costs).
On Betterhelp perhaps we need to dig deeper by comparing it with competitors in details and try to understand how well their position is. Theoritically speaking the needs for people to get mental help remotly is a real demand so the market should exist. The question is which buisness/service model will fit the best.
Back to the topic on price movement, you see $SE got pumped and dumped as well, but the later is clearly due to considerable slowdown in their gaming biz. With TDOC, there is no news available. If any, they were introducing new features to offer more integrated services and care for weight management which should add customer stickness.
It's also apparently disconnected with the tech & growth rally happened in the past week. So I can only extrapolate that this is beyond the market action and something else is happening within the company. The other possibility is that people are betting the company will have much less value with AI tech replacing remote doctors. Then this will be similar to the CHGG/FVRR story.
I actually kind of like TDOC. If it was forced to be either long or short, would definitely be long.
I've done a good amount of work on BetterHelp while researching Talkspace (TALK). And what I'm not quite sure about for the part of the industry is how viable the private competitors are, particularly in an environment where targeted marketing is much more difficult.
Do they eventually fade away, since their model is just based on acquiring customers via Google (and these days probably TikTok) and therefore they need access to continued capital? Does that in turn mean that at some point, BetterHelp leads in a "winner takes most" market, in which case that business alone can be worth something like the current enterprise value?
Those questions I haven't quite answered to my satisfaction, and I'm not 100% behind TDOC management, either. But I think it's intriguing, definitely.