Please ensure Javascript is enabled for purposes of website accessibility

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

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

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.  

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Teladoc Health, Inc. Stock Quote
Teladoc Health, Inc.
TDOC
$34.83 (4.88%) $1.62

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
316%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/03/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.