Please ensure Javascript is enabled for purposes of website accessibility

Why Teladoc Stock Jumped on Wednesday

By Daniel Sparks – Apr 15, 2020 at 6:04PM

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 number of virtual medical visits on the telehealth company's platform has soared, and fiscal first quarter revenue crushed management's guidance.

What happened

Shares of telehealth specialist Teladoc (TDOC -0.94%) soared on Wednesday, rising 9.2%. This gain came even as the market fell. Capturing bearishness in the overall market on Wednesday, the S&P 500 declined by 2.2%.

The growth stock's gain was fueled by the release of strong first quarter preliminary results after market close on Tuesday. 

A lady visiting with a doctor virtually over her laptop

Image source: Getty Images.

So what

First quarter revenue is expected to be between $180 million and $181 million, up from $129 million in the year-ago quarter. This is far ahead of the $169 million to $172 million the company had guided for. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the period will be around $10 million to $11 million, management said. This is at the high end of management's guidance for the metric.

"As a result of the global outbreak of COVID-19, Teladoc Health has experienced an unprecedented surge in demand for its services," management said in the press release. More specifically, Teladoc noted that it is often providing more than 20,000 virtual medical visits per day -- more than double the rate of visits in the first week of March.

Now what

The company's ability to serve customers at a much higher rate during this period highlights how agile and scalable Teladoc's solution is.

"Virtual care is playing a central role during this crisis, when the traditional healthcare system is under intense pressure, and I am confident that role will only continue to expand," said Teladoc CEO Jason Gorevic in the business update on Wednesday.

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Teladoc Health. The Motley Fool has a disclosure policy.

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 Stock Quote
Teladoc Health
$26.77 (-0.94%) $0.26

*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
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/06/2022.

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.