Analysts are pessimistic on Teladoc amid slowing growth: should you buy or sell?
- Teladoc Health shares fell 2% on Wednesday morning after several analysts lowered their expectations.
- Analysts cited slowing growth following disappointing Q2 results on Tuesday.
- The stock fell more than 12% over the last 30 days and is down nearly 26% this year.
Teladoc Health Inc. (NYSE:TDOC) shares pulled back 2% Wednesday morning after several analysts lowered their expectations. The company reported its fiscal second-quarter results on Tuesday, missing analyst expectations on earnings. Analysts cited Teladoc’s slowing growth for their reduced optimism.
George Hill of Deutsche Bank downgraded Teladoc stock from buy to hold with a price target of $153, noting the company may not replicate its 2020/21 growth in the next 12 months.
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We believe Teladoc has a very good business led by a very strong management team, but that does not make TDOC a good stock.
On the other hand, Evercore ISI analyst Elizabeth Anderson lowered the TDOC stock price target from $170 to $150, citing robust competition, while Stifel’s David Grossman’s is $165 down from $195.
Should you buy Teladoc shares in Q3 2021?
In the most recent earnings report, Teladoc’s Q2 GAAP loss per share of $0.86 missed analyst expectations by $0.32. Analysts expect full-year 2021 earnings to fall by nearly 290% this year before staging a 63.30% recovery next year.
Therefore, things could worsen for TDOC shares before getting better, meaning the stock has limited upside potential this year. Consequently, it would be best to monitor how the company performs over the next few quarters relative to expectations to determine if it is worth buying.
Technical overview: Teladoc stock price predictions for Q3 2021
Although Teladoc shares have pulled back significantly since spiking earlier this year, the stock lacks short-term catalysts to drive recovery. Technically, TDOC shares are yet to hit oversold conditions in the 14-day RSI, leaving more room for declines.
The stock price continues to trade below the 100-day moving average in the intraday chart after falling under in late February. Therefore, the bearish pressure is persistent.
Investors can target extended declines at approximately $133.45 or lower at $109.03. The resistance levels are $170.94 and $193.79.
Bottom line: the case for selling Teladoc shares now
In summary, Teladoc Health shares appear to be trading under significant bearish pressure after analysts followed Tuesday’s disappointing earnings report with revised TDOC price targets.
With earnings expected to fall by nearly 290% this year, it could take time before Teladoc price stages a significant rebound. Therefore, it may be best to wait for the stock price to fall further before buying.
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