Rebounding TDOC Grabs Option Bulls, Analyst Attention

The security boasts a 144% year-to-date lead

Deputy Editor
Dec 22, 2020 at 1:13 PM
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Rallying teleheath stock Teladoc Health Inc (NYSE:TDOC) is capturing options bulls' attention today, following a bullish analyst note from Evercore ISI. The brokerage initiated coverage on TDOC, starting with an "in-line" rating and a $215 price target -- a 7.6% premium to last night's close -- adding that it expects the company to grow over 30% in the next few years, bolstered by improving profitability and a recently closed transaction with Livongo Health (LVGO), which added digital scalpels to the firm's surgical kit. 

So far, 18,000 calls and 6,634 puts have crossed the tape in today's trading -- double what's typically seen at this point. The weekly 12/31 210-strike call is the most popular, followed by the January 2021 220-strike call. At last check, TDOC was up 2.2% at $204.20, which could suggest these traders are speculating on more upside for the equity by the time these contracts expire. 

This preference for bullish bets has been the norm for TDOC of late. The equity's 10-day call/put volume ratio of 2.93 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), stands higher than 74% of readings from the past year. This implies long calls have been more popular than usual over the past two weeks. 

While it looks like analysts are beginning to come around to the equity, which sports a 144% year-to-date lead, some members of the brokerage bunch are still on the fence. Coming into today, eight of the 15 covering the stock considered it a "hold." This could help push TDOC even higher up the charts, should some of these analysts follow Evercore's lead. 

A quick look at the charts shows TDOC in recovery mode, following a bear gap last week. Now, the security is eyeing its third-straight close in the black and testing recent resistance at the 60-day moving average, which has kept a lid on shares since late October. 

TDOC Dec 22

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