What Happened:
Shares of digital medical services platform Teladoc Health (NYSE:TDOC) jumped 10.9% in the morning session after Jefferies analyst provided positive updates on the stock, highlighting a 12% web traffic increase for BetterHelp (Teladoc's mental health platform) in July and August 2024. Despite seeing short-term opportunities, the firm cautioned that aggressive EBITDA estimates and long-term concerns could hinder sustained momentum.
Is now the time to buy Teladoc? Access our full analysis report here, it’s free.
What is the market telling us:
Teladoc’s shares are very volatile and over the last year have had 20 moves greater than 5%. But moves this big are very rare even for Teladoc and that is indicating to us that this news had a significant impact on the market’s perception of the business.
The biggest move we wrote about over the last year was 7 months ago, when the stock dropped 24.7% on the news that the company reported fourth-quarter results that missed analysts' revenue estimates.
Looking ahead, revenue guidance for the next quarter and full year also missed consensus estimates. While adjusted EBITDA guidance for the next quarter fell below expectations, full-year guidance came in ahead. The company provided a three-year growth outlook with expectations for low to mid-single-digit top-line growth, driven by mid-single-digit growth in the IC (Integrated Care) segment and low single-digit growth in the BetterHelp business. Teladoc acknowledged that with most U.S. customers already accessing virtual healthcare services, revenue growth from the U.S. virtual care business, which represents half of the Integrate Care segment, will be in the low single-digits range. This implied that Teladoc expects most of the revenue growth in its IC segment to be driven by its chronic care products.
Overall, this was a weaker quarter for the company, with markets likely worried given the underwhelming growth outlook.
Teladoc is down 59.3% since the beginning of the year, and at $8.94 per share it is trading 59.6% below its 52-week high of $22.10 from December 2023. Investors who bought $1,000 worth of Teladoc’s shares 5 years ago would now be looking at an investment worth $130.06.
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefitting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.