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Why Teladoc Health Stock Popped 23% in February While the Market Dropped

By Beth McKenna - Mar 3, 2020 at 8:30AM

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The novel coronavirus was one of two main catalysts that boosted shares of the telehealth service provider last month.

What happened

Teladoc Health (TDOC 4.88%) stock jumped 22.9% in February, according to data from S&P Global Market Intelligence. That's a particularly strong gain when you consider that the S&P 500 index dropped 8.2% last month. The market sell-off was due to concerns that the novel coronavirus COVID-19 could take a huge bite out of global economic growth.

Shares of the leader in virtual healthcare have returned 48.1% in 2020 through March 2, versus the broader market's negative 4% return.

Person in lab coat typing on a laptop.

Image source: Getty Images.

So what

We can attribute Teladoc Health stock's robust performance last month in part to the fast-spreading COVID-19. Investors are betting that the virus will spur more patients to eschew visiting physicians' offices, where they could potentially get infected, in favor of using Teladoc's services. 

The company's Feb. 26 release of its fourth-quarter and full-year 2019 results also contributed to the stock's climb last month. Both the quarterly top and bottom lines beat the Wall Street consensus estimates, and guidance also came in stronger than analysts had projected. Shares surged 15.7% the next day.

In Q4, Teladoc's revenue rose 27% year over year to $156.5 million, topping the $153.0 million expectation. Its net loss narrowed to $19 million, or $0.26 per share, from $24.9 million, or $0.35 per share, in the year-ago period. This result beat the average analyst estimate, which was for a loss of $0.33 per share. 

Now what

For Q1, the company expects revenue of $169 million to $172 million, and a net loss per share of $0.37 to $0.34. Wall Street had been modeling for a net loss of $0.36 per share on revenue of $163.9 million. 

For full-year 2020, the company anticipates revenue of $695 million to $710 million, and a net loss per share of $1.19 to $1.06. Analysts had been expecting a net loss of $1.19 per share on revenue of $692.9 million.  

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Teladoc Health, Inc. Stock Quote
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