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Why Teladoc Health Fell by 6.6% Today

By Eric Volkman - May 10, 2021 at 5:48PM

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A noted analyst's price target cut wasn't healthy for the stock.

What happened

Shares of Teladoc Health (TDOC 6.13%) were a bit sickly on Monday after one of the more prominent analysts tracking the stock knocked his target price down.

So what

Truist Securities' Sandy Draper, who has closely followed the fortunes of Teladoc throughout the coronavirus pandemic, was the prognosticator shaving his price target. He now believes the company is worth $206 per share, quite some distance down from his previous level of $275. However, Draper still recommends Teladoc as a buy.

Medical professional using a laptop with his stethoscope nearby.

Image source: Getty Images.

The change comes not long after Teladoc reported its first-quarter results. Fueled by the absorption of Livongo Health and a dramatic, coronavirus-era increase in demand for telehealth services (its specialty), the company enjoyed year-over-year revenue growth of 151%.

That was more or less expected by analysts, however, while the healthcare services provider's net loss was just shy of $200 million. That compared very unfavorably to only $29.6 million in the year-ago quarter and was significantly deeper than the average analyst forecast.

Now what

While investors can accept Teladoc's lack of upside surprise in revenue and even continued losses on the bottom line, other areas of the company's operations are concerning. For instance, on a quarter-over-quarter basis in Q1, its number of paid members -- a crucial metric for Teladoc -- actually slipped to 51.5 million from 51.8 million.

Besides, the investor trend these days is away from coronavirus stocks like Teladoc in favor of companies seemingly better poised to benefit from the recovery as the pandemic subsides.

Eric Volkman 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.

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Stocks Mentioned

Teladoc Health, Inc. Stock Quote
Teladoc Health, Inc.
$40.32 (6.13%) $2.33

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