Analysts play a curious role in the stock market. Most people know they publish research reports and ask questions on conference calls. What many may not realize is there is a significant positive bias to the coverage. After all, the research relies on access to the company. And that access can quickly disappear with a negative opinion. Still, it's worth noting when every analyst is on the same page about a stock.

That's what has happened with Teladoc (TDOC 1.10%). Although shares of the virtual care provider are down 52% from the pandemic-driven peak, all 25 analysts have a price target higher than where shares currently trade. The lowest is $140 -- in line with the current price. Here are a few reasons why.

A young person with colorful hair blows their nose and looks intently at a mobile phone in front of their face.

Image source: Getty Images.

Patient behavior has changed

One of the biggest questions facing the company before the pandemic was how quickly people would shift to virtual visits -- or if they would at all. That question has been answered over the past 18 months. Visits on the company's platform have skyrocketed. The first six months of each of the past four years shows how much things have changed.

Period Total U.S. Visits International Visits
1H 2021 3,037,000 944,000
1H 2020 2,302,000 885,000
1H 2019 1,444,000 527,000
1H 2018 1,078,000 60,000

Data source: Teladoc.

Teladoc reports activity for its two types of agreements. The first is a subscription with healthcare customers that allow access to their members. The second is a fee-only contract where revenue is generated on a per-visit basis. On the subscription side, utilization -- the percent of members who have at least one visit -- is an important metric for both the company and its clients. It's a good indicator of whether patients find the service valuable. Even as COVID-19 subsided, the answer was a resounding "yes!"

Quarter Utilization
Q2 2021 21.5%
Q2 2020 16%
Q2 2019 9.1%
Q2 2018 8%

Data source: Teladoc.

That bodes well as Teladoc engages new health systems, insurers, and employers. It should help restart the growth in members that was pulled forward in 2020. That would likely help the stock price too.

Membership slowdown won't last

One of analysts' big concerns has been the slowdown in the number of members under contract. Despite the concern, it's easily explainable. The pandemic forced many prospective customers to speed up their decision and sign on to the company's platform. It's obvious from the math. Averaging the past two years still nets to 39% compounded growth. That's nothing to be upset about.

Period U.S. Paid Members YOY Growth
1H 2021 52.0 million 1%
1H 2020 51.5 million 92%
1H 2019 26.8 million 19%
1H 2018 22.5 million 48%

Data source: Teladoc. YOY = year over year.

What isn't known is how difficult it will be to restart growth. The entire world went remote last year. That could mean winning new customers in the future requires taking them away from another provider -- a more difficult task than convincing them to sign up for the service to begin with. For example, Amwell (AMWL 0.54%) had 400% more visits in 2020 than the previous year and Doximity (DOCS -5.96%) launched its video dialer in the middle of the pandemic, quickly becoming one of the most used telemedicine tools. They will both fight to keep those gains.

Management isn't worried. It recently announced several new large customers and said the pipeline for deals was 20% greater than it was at the same time last year.

Multi-product is the future

Another reason not to worry is the 2020 acquisition of digital chronic care management company Livongo. By adding its services, Teladoc is able to charge significantly more per member. On the recent earnings call, CEO Jason Gorevic reported that multi-product sales now make up three out of every four deals, and the price per member per month came in at $2.47. That has climbed 142% over the same time last year and 10% over the first quarter. Buying Livongo is looking like a great strategic move, but it was expensive.

Teladoc paid $18.5 billion for Livongo. That included issuing equity that has more than doubled the share count from this time last year. Teladoc has also blamed almost $800 million in one-time expenses on the merger. Thankfully, with the calendar soon lapping that fall 2020 deal, the worst may be behind it.

A lot of negativity priced in

With slowing growth, shareholder dilution, and the back end of a pandemic priced in, it seems analysts think it can't get much worse for Teladoc. That's a dangerous way to think about investing. That said, if management can continue reporting new deals -- and members -- and inch toward profitability, Wall Street might be right. For now, there is plenty for traders on both sides of the argument to point at.