Here’s why the Teladoc stock price remarkable collapse continued

By:
on Feb 21, 2024
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  • Teladoc Health share price dived by almost 20% in extended hours.
  • The company published weak financial results and forward guidance.
  • Betterhelp's growth is set to continue decelerating this year.

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Teladoc (NYSE: TDOC) stock price has had a remarkable collapse in the past few years.

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The stock surged to a record high of $308.28 during the pandemic and has now dropped to less than $20. This makes it one of the worst-performing Cathie Wood stocks.

Teladoc earnings download

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Teladoc is a disruptive company that is aiming to change the healthcare industry by making telemedicine available to most people.

The company has grown over the years to serve millions of people in the US.

Teladoc is also known for implementing one of the worst mergers in recent years.

At its peak, the company spent $18 billion to acquire Livongo Health in a deal that created a $37 billion collosus.

It then recorded a noncash impairment charge of over $13 billion as the deal disappointed.

Today, Teladoc, which also includes Livongo, has a market cap of $3.4 billion, meaning that its investors have lost a fortune.

And this trend will continue on Wednesday now that the company published weak financial results.

Teladoc’s revenue rose by just 4% YoY in the fourth quarter to $661 million, missing analysts estimates.

Its EBITDA came in at $114 million. For the year, the company’s revenue rose by just 8% to $2.8 billion, meaning that it is no longer the growth story it was.

Teladoc’s active members are also not growing as fast as Wall Street would want. Its total chronic care enrolment stands at 1.16 million, a 14% increase. This jump was mostly because of illnesses like hypertension, diabetes, and weight management.

Betterhelp, a company that spends a fortune in marketing, saw its revenue come in at $276 million, bringing its annual figure to $1.1 billion.

Worse, the company’s guidance was softer than expected as it sees its revenue growing by just 2.5%.

Teladoc’s main challenge is that it seems like the number of people seeking virtual healthcare is slowing now that clinics and hospitals have opened up. Also, opportunities for upselling these customers have reduced. 

Further, Betterhelp is struggling. It had flat revenue growth after the company spent millions of dollars in marketing. And now, they expect that its revenue will drop by 6% in the first quarter.

Teladoc stock price forecast

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teladoc stock

TDOC chart by TradingView

Turning to the daily chart, we see that the TDOC share price made some recovery, rising from $15 in November to $22.56 in January.

It then suffered a harsh reversal after publishing weak financial results that saw it move to $16.7 in the extended hours. 

I estimate that the stock’s sell-off will accelerate as analysts start cutting their estimates. If this happens, the shares will likely crash to a low of $15, its lowest point in 2023. This means that it could drop by about 30% from its Tuesday close.

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