There are three sorts of stories we've gravitated towards in the past 95 episodes of Behind the Idea:

Value traps and/or value plays, the sorts of junk we might invest in. Examples: Cars.com (CARS), AT&T (T), Dell (DELL), Kelloggs (K) from the short side.

Growth stories that break our value-oriented brains. Examples: Amazon (AMZN), Shopify (SHOP), Crowdstrike (CRWD), Lyft (LYFT), PagerDuty (PD) from the short side.

Battleground stories or news stories. Examples: Boeing (BA), PG&E (PCG), Chipotle (CMG), Trupanion (TRUP).


This week we cover Teladoc (TDOC), which falls squarely in categories 2 and 3. The company is a fast grower on the top line, but it's yet to crack break even profitability metrics. We've published many short ideas on the company on Seeking Alpha, but we recently published a PRO+ top idea by Value Alpha that takes the long side. As with many of these stories, there are both exciting things going on and questions raised that deserve a closer look.
We break down the long case, and then we raise our questions. Beyond assessing the Teladoc story itself, we also get into what we look for in growth stories like this, and what it means to invest in an execution based story.
Topics Covered
3:00 - Assessing the long case

8:15 - Market leadership and the total addressable market story

13:45 - Teladoc's revenue model and Value Alpha's valuation model.

19:00 - Pricing vs. valuation rears its head

22:00 - Teladoc's industry position and is it a real moat?

27:45 - Valuation arbitrage and the messiness in the story

31:00 - What about the short case?

36:30 - The significance of the 'execution-based' story

40:00 - The reliance on acquisitions and the trends in visit fees.


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