Teledoc Health (NASDAQ:TDOC) stock fell 6% overnight after announcing a review of its operations and missing earnings estimates. The company also issued soft guidance in its third-quarter report.
Teledoc runs telemedicine services under brands like Livongo and Better Help. Shares opened at about $17 each, a market cap of $2.8 billion on expected 2023 revenue of $2.5 billion.
For the September quarter, Teledoc lost $57 million, 35 cents per share, on revenue of $660 million. It ended the quarter with about $1 billion in cash.
What’s Up, Teledoc?
Teledoc was a pandemic-era star. Shares rose to a high of $286 in 2021 on Covid-19 sick calls and its Better Help mental health unit, which advertised heavily on podcasts and, controversially, on YouTube. But the company booked $13.7 billion in losses during 2022, mostly on goodwill, after paying $18.5 billion for Livongo in 2020. The stock is down 23% in 2023.
During 2023, the company has been growing slowly and has tried to limit losses. The loss for the third quarter was its smallest of the year. But analysts, noting the slow growth and slight miss on revenue, cut their price targets, which led to selling.
In his earnings release, CEO Jason Gorevic emphasized Teledoc’s adjusted Earnings Before Income Taxes, Depreciation and Amortization (EBITDA), which increased 133% at the company’s BetterHelp mental health business and 73% overall. For the year so far, revenue is up 10%.
Analysts were simply hoping for more. There are 12 following Teledoc at Tipranks, with only three now telling investors to buy the stock and an average price target of $26. Bulls called the miss on revenue small, noting the company’s positive cash flow.
TDOC Stock: What Happens Next?
Teledoc got a huge boost from the pandemic, leading to expectations it could not meet when the emergency ended. Management is promising little more than slow and steady progress from here.
As of this writing, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
