Teladoc Health is facing increased pressure from a challenging macroeconomic environment and consumer weakness that will slow its pace of growth, according to Guggenheim. The firm downgraded shares of Teladoc to sell from neutral on Wednesday with a $25 price target, which implies downside of more than 36% downside from Tuesday's close. Teladoc got a big boost from the early days of the Covid-19 pandemic, which is now waning, according to Guggenheim. The firm now sees revenue growth slowing to about 10% in 2023, lower than consensus estimates of 15% growth. "The COVID-19 related demand for virtual care accelerated the growth in members, but as a result the company now expects limited member growth (in January 2022, management suggested 1-5% annual member growth)," Sandy Draper wrote in a Wednesday note. "Considering the number of people who have TDOC coverage is ~50% of the employer sponsored health insurance market, based on our estimates, it makes sense why member growth will likely not be a significant driver for the base business," Draper added. Multiple business areas slowing Given this, Teladoc's Primary360 would need to be successfully adopted this year for it to meet Guggenheim's base business growth case. However, the company has said Primary360 will not be a material contributor in 2022 but will ramp up in the coming years. Guggenheim also sees limited growth potential in Teladoc's InTouch and chronic care sectors. BetterHelp trends are also deteriorating as the U.S. consumer pulls back spending due to high inflation and the potential for an upcoming recession. The segment accounts for roughly 40% of Teladoc's 2022 revenue. "We see BetterHelp as having to choose between "the lesser of two evils": investing in advertising at a worse ROI, or pulling back on advertising and adding fewer new users," Draper wrote. Teladoc is also seeing pressure in converting EBITDA to free cash flow, in part due to higher capitalized software according to the note. "In 2021, TDOC converted close to 50% of their EBITDA to FCF," said Draper. "We see that slowing down to 24% in 2022 and 30% in 2023."