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Why Teladoc Health Shot More Than 9% Higher on Tuesday

By Eric Volkman - Updated Mar 11, 2021 at 2:50PM

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Investors are coming back to certain coronavirus stocks.

What happened

Rapidly becoming an early contender for "See-Saw Stock of the Year," Teladoc Health (TDOC 6.94%) closed nearly 9.3% higher Tuesday. That sharp upward move was due more to investors zeroing in on recent downers than anything material coming from the remote healthcare services company.

So what

Teladoc Health is a top coronavirus stock on the market, and it recently hasn't been in an enviable position.

Elderly man using telemedicine services.

Image source: Getty Images.

Investors had been shedding such titles since the outbreak appears to be fading and a new, post-pandemic world is fast approaching. The theory is that companies in coronavirus-decimated sectors (travel, restaurants, etc.) are poised for more dramatic rebounds as the global healthcare scourge fades away. There's also some concern that numerous tech-heavy coronavirus stars -- Teladoc being one -- are unprofitable, at times deeply so.

Perhaps for many investors, it's safer to place bets on a post-pandemic horse that more consistently operates in the black than a trendy money-loser.

Now what

While it's too early to tell whether the Tuesday rally portends a long-term change in sentiment on Teladoc, the company still has great potential. Yes, its torrid revenue growth is due for a cooling, but its remote healthcare solutions will continue to be needed by an aging -- and therefore less mobile -- U.S. population. And Livongo Health, its splashy 2020 acquisition, has yet to expand meaningfully outside the U.S.

Teladoc is a company that should continue to be on every growth-hungry investor's radar.

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Teladoc Health, Inc. Stock Quote
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