March 31, 2026 14:13 ET | Source: Pineal Capital Management
DUBLIN, March 31, 2026 (GLOBE NEWSWIRE) — The following is an open letter issued by Pineal Capital Management:
Board of Directors
Teladoc Health, Inc.
2 Manhattanville Road, Suite 203
Purchase, NY 10577
31st March 2026
**See disclaimers at end of letter**
Dear Members of the Board, Management and Fellow Stakeholders,
Pineal Capital Management (“We”), the Advisor to Pineal Capital Fund 1 (the ‘’Fund’’), is a special opportunities investment advisor, seeking deep-value opportunities within secular growth markets, with a specific focus on companies that are under-owned, under-researched and underperforming. Pineal Capital Fund 1 is a shareholder in Teladoc Health (“Teladoc” or the “Company”).
We have engaged with the Board and management team of Teladoc for several months. Whilst we have found the management team open and engaging, the board’s slow pace of action around key areas leaves the company open to an opportunistic takeover approach given the depressed valuation of the company’s stock at present. This is more pertinent now than ever, given the recent Talkspace transaction. As shareholders we would like the company to unlock the tremendous value that we see, as an independent, public company. We believe the current market price is heavily disconnected from the true embedded value of the business and significantly misprices its positive, longer-term prospects.
Teladoc is the clear global leader in virtual healthcare, operating two core segments: (1) Integrated Care, an enterprise virtual-care platform serving employers, health plans, and government programs, and (2) BetterHelp, the world’s largest direct-to-consumer and payor-supported mental-health platform. With a trusted brand, a member base exceeding 100 million lives, a strong balance sheet, and scale that smaller competitors cannot match, Teladoc is uniquely positioned to capture the secular tailwinds in telehealth and virtual care.
This letter sets forth a brief overview of the investment thesis we see in Teladoc and calls on the Board of Directors and management team to take decisive action to realise Teladoc’s full potential as a global leader in virtual healthcare.
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Despite being the clear global leader in virtual healthcare, the company trades at a distressed-level valuation of ~4.18x 2026 EV/EBITDA and ~14% FCF yield (as per Bloomberg consensus data at the time of writing) due to a series of missteps that have eroded investor confidence. These include:
- Over-valued Acquisitions: Specifically, the ill-timed acquisition of Livongo in 2020. This was completed at a significant premium and has yet to deliver the expected value. This was unnecessarily partially financed with convertible debt. Did the Board believe the company’s stock was undervalued at the time when its share price was ~$125 per share? Why take on any debt at that time? This Board has little self-funded “skin in the game.” When we look at the inaction around share buybacks today, we wonder is this company governed by a board that fully appreciates valuation, capital structure, equity value creation and the importance of timely action? We note the company has referenced potential buybacks, but no action has been taken to date.
- Capital Allocation: Given the history of poor capital allocation, we believe the Board should clearly outline its current investment criteria for acquisitions. It is difficult to see how Teladoc can complete M&A transactions that are value accretive at the present juncture given its depressed valuation. The Company has completed the following acquisitions in recent times: $65mm on Catapult (earn-out up to $5mm), $30mm on UpLift (earn-out up to $15mm) and ~$16.6mm on Telecare Australia. We do not know how this $131.6mm of committed capital (upfront plus earn-outs) contributes to Teladoc’s earnings now or on a go-forward basis. We also note goodwill impairment charges were incurred against two of these recent transactions in 2025. Will Teladoc continue to favour strategic bolt-on deals that are non-accretive to earnings? We understand the need to address gaps in the Company’s offerings, and we agree with the strategic rationale of these transactions, but we are unclear as to what the expected financial returns are. The risk here is that the real benefit of these deals flow to an opportunistic acquirer and not existing shareholders.
- Stock Performance: No credible plan to address the chronically undervalued and underperforming stock price. The stock has declined more than 90% from pre-COVID highs (and ~98% from the post-COVID highs) despite the company’s strengthened competitive position. In our view, Teladoc should be repurchasing stock at present levels. The Company has an under-geared balance sheet, and we believe any private equity acquirer would meaningfully re-gear this balance sheet. We would encourage the Company to pull on the value-creating levers before a would-be acquirer does so in private hands.
- Investor Communication: The absence of a clear, publicly articulated multi-year business plan via an Investor Day, along with updated investor relations materials has not helped market sentiment or understanding of the stock. Investors remain unclear on capital-allocation priorities, segment-level targets, and the path to sustainable earnings growth.
- Equity Dilution: Persistent, high stock-based compensation has meaningfully diluted existing shareholders and indicates a misalignment between management incentives and long-term value creation. Since 2020, basic shares outstanding have increased from ~90 million to ~177 million as of December 2025. The absence of share buybacks to offset this dilution at any time in the Company’s public history (and not least in recent months with the stock price being so depressed), illustrates the misallocation of capital and a forgoing of value creation for shareholders.
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We would highlight that the above issues are all readily and swiftly fixable, and as such we believe the market is overlooking a material inflection opportunity in revenue and earnings for Teladoc. We urge the Board and management to adopt a comprehensive value-unlock plan centred on the following three pillars:
- Cost Efficiencies: Further cost-cutting initiatives to expand margins. This should meaningfully accelerate once the BetterHelp payor model gains full traction and OpEx can be optimised.
- A Major Share Buyback Program: We believe a $200 million+ authorization at current levels is highly feasible given the under-levered balance sheet (sub ~1x net debt/EBITDA) and robust free cash flow generation.
- Strategic Review: A full strategic review of the business including exploration of a break-up of the two core businesses – Integrated Care and BetterHelp – into separate entities, via a sale or spin-off transaction. Such a separation would allow each platform to be valued on its own merits, eliminate the current quasi-conglomerate discount, and unlock immediate, substantial value for shareholders. We reiterate here that we believe the company is vulnerable to an opportunistic takeover that would meaningfully undervalue the business given its longer-term prospects.
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The Teladoc opportunity is reinforced by powerful near-term business tailwinds that the market is yet to fully appreciate. These include:
- Favourable Policy Environment: The permanent allowance of first-dollar coverage of virtual care in high-deductible health plans under the One Big Beautiful Bill Act, combined with the $50 billion Rural Health Transformation (RHT) Program and complementary CHRA (Collaborative for Healthy Rural America) initiatives, materially lowers out-of-pocket barriers and expands reimbursement for telehealth services. These changes are expected to drive higher utilization across both business segments beginning in 2026. We see upside to company guidance from successful tenders via the CHRA initiative.
- Launch of the New 24/7 Virtual Care Platform: This offering expands access, improves member retention, and positions Teladoc to capture a greater share of urgent and preventive-care patients.
- Payor Model Progress: BetterHelp exited 2025 with a ~$28 million insurance-supported revenue run-rate and has guided to a $100 million exit run-rate for 2026. The transition to an insurance-payor model should remove the out-of-pocket friction that previously limited BetterHelp’s conversion to 18–20% on its ~4 million annual patient funnel. The shift to an insurance-supported model should lead to an expanded funnel of potential patients requesting care, and higher conversion rates and higher lifetime value (LTV) end-users. Ultimately, we believe the payor model could unlock a billion dollar-plus revenue opportunity.
- International Expansion: Teladoc’s global brand and platform infrastructure provide a clear path to replicate the U.S. success in additional high-demand markets.
Teladoc has three mental health-related business lines that we believe are very scalable and valuable. Firstly, the EAP (Employee Assisted Program) offering, Wellbound, generates ~$150mm of revenue within the Integrated Care segment. We see significant opportunities for this platform to be integrated into or partner with workforce software solutions and drive greater scale.
Secondly, the BetterHelp DTC business (currently facing headwinds in the US but growing internationally) generated $950.4mm of revenue in 2025. Even in a Bear Case scenario, we believe this business could be put into run-off with reducing OpEx spend, and a DCF analysis on this basis indicates it would still be worth over ~$600mm, or approximately 67% of the current market cap (as at the time of writing). We would not suggest this course of action is taken but simply wish to illustrate the clear value in this business despite recent challenges.
Finally, the new and fast-growing payor model is expected to exit this year on a ~$100mm run-rate, which is impressive from a standing start position from Q3 last year. We think Teladoc’s mental health platform ultimately represents a multi-billion dollar revenue opportunity for the Company, with a multi-year revenue and earnings growth profile.
In aggregate, we see a combined mental health platform offering being the hidden crown jewel within the business. We would highlight that recent private market valuations underpin our conviction in this regard.
Specifically, we note the recent acquisition of smaller peer Talkspace at implied NTM multiples of 3.0x revenue / 25x EBITDA multiple. Prior to this, Talkspace had traded at an average multiple of 17.5x EV/NTM EBITDA. This compares to Teladoc’s current multiples of 0.47x NTM revenue / 4.18x NTM EBITDA (per Bloomberg consensus estimates as at the time of writing). We would highlight that Teladoc generated over $1.1bn of mental health related revenue in 2025 (comprising BetterHelp and EAP combined).
The Talkspace transaction provides a clear read-across for Teladoc: the virtual mental health care sector is being re-rated upward, and Teladoc’s superior scale, network, and diversified offerings should command a premium valuation once the turnaround is fully understood.
On that basis, we urge management to act before the option is taken out of their hands by an unwelcome suitor.
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As shareholders, we are excited by Teladoc’s fundamental potential but concerned that continued inaction risks a private-market bid at a level well below true intrinsic value. We do acknowledge the good progress made to date and the purpose of our letter today is to highlight the future opportunity we see and how the company should best capitalise on this in relation to its public listing. The window to act strategically is open today and we strongly suggest that the Board and management communicate, and then execute on a clear, multi-year plan with urgency addressing each of the points outlined in this letter.
We welcome the opportunity to engage with the management team, the Board and fellow shareholders to help realise Teladoc’s full potential as the pre-eminent global leader in virtual healthcare.
Respectfully,
Pineal Capital Management
**Important Disclosures**
This letter has been prepared by Pineal Capital Management (“Pineal”) in its capacity as investment advisor to Pineal Capital Fund 1 (the “Fund”), which is a shareholder of Teladoc Health, Inc. (“Teladoc”).
This letter is provided for informational purposes only and reflects Pineal’s opinions as of the date hereof. Nothing contained herein constitutes, or should be construed as, investment advice, an offer to sell, or a solicitation of an offer to buy any securities. This letter does not constitute a recommendation to any person to purchase, sell, or hold any securities, including those of Teladoc.
Pineal and the Fund may beneficially own, or have an economic interest in, securities of Teladoc. Pineal and the Fund reserve the right to change their views at any time and may buy, sell, cover, or otherwise change the form or substance of their investments in Teladoc (including through derivatives) at any time without notice, including after the date of this letter.
Pineal is not acting in concert with, and has no agreement, arrangement or understanding with, any other shareholder or third party in connection with the matters described in this letter.
This communication is not directed at and is not intended for distribution to or use by retail investors. It is intended solely for market participants capable of evaluating the information contained herein and making their own investment decisions.
Certain statements contained in this letter are forward-looking statements, including statements relating to potential strategic actions, financial performance, valuation, and future opportunities. These statements are based on current expectations, estimates, projections, and assumptions that are inherently uncertain and subject to risks and contingencies. Actual results may differ materially from those expressed or implied. Pineal undertakes no obligation to update any forward-looking statements.
The information contained in this letter has been obtained from publicly available sources and third parties believed to be reliable; however, Pineal has not independently verified such information and makes no representation or warranty, express or implied, as to its accuracy, completeness, or timeliness. Any estimates, projections, or valuation analyses are based on assumptions that may not prove to be correct.
This letter reflects Pineal’s opinions and analysis as of the date hereof only. No reliance should be placed on this letter for any investment decision. Investors should conduct their own independent analysis and consult their own advisors.
This letter is not intended to form the basis of, and should not be relied upon in connection with, any investment decision or voting decision with respect to Teladoc securities.
