What happened
Shares of telehealth leader Teladoc Health (TDOC -1.16%) rose 10.4% in June, according to data from S&P Global Market Intelligence. This pop was probably due to some investors believing the market's sell-off of the stock this year has been overkill and presents an attractive buying opportunity.
For context, the S&P 500 returned 2.3% last month.
Even with June's gain, in 2021, shares of Teladoc are down 17.8% through Thursday, July 1. Last year, the large-cap stock (a stock with market cap of $10 billion or more) was up a whopping 139%, led by the company's pandemic-driven surge in new business.
Image source: Getty Images.
So what
Teladoc didn't release any notable, market-moving news last month, nor do there seem to be any Wall Street analyst upgrades to explain the stock's rise of more than 10% in June. Moreover, that gain didn't come in just one or two days, but rather, gradually at the end of the month, suggesting there was probably no one specific event that was the catalyst.
So, we can probably attribute the stock's pop last month to simply the type of partial rebound that occurs when enough investors think a stock has been oversold. By May, Teladoc's stock price was cut in about half from its all-time high, which was set in early February.
Granted, the company's growth will slow somewhat due to the improving pandemic situation, but a 50% drop does seem overdone if you believe that many patients will continue to use virtual healthcare services when possible.
For some context, in the first quarter, Teladoc's revenue soared 151% year over year to $453.7 million, which was about $2 million more than Wall Street had been expecting. Organic revenue (which excludes the contributions from the Livongo Health and InTouch Health acquisitions) jumped 69%.
The company's Q1 net loss was $199.6 million, or $1.31 per share, down from a net loss of $29.6 million, or $0.40 per share, in the year-ago period. This result likely disappointed some investors, as analysts had been projecting a loss of $0.62 per share.
Now what
Investors shouldn't have long to wait for material news. While Teladoc hasn't yet announced a date for the release of its second-quarter results, it should be sometime in late July or early August.
For Q2, management expects revenue of $495 million to $505 million, or growth of 105% to 110% year over year.
Teladoc doesn't provide a bottom-line outlook. Wall Street is currently modeling for a loss of $0.56 per share in the second quarter compared with a loss of $0.34 per share in the year-ago period.
For more on Teladoc, you can read why my colleague Sean Williams recently called it one of the top stocks to buy in July.
