Please ensure Javascript is enabled for purposes of website accessibility

Why Teladoc Stock Fell 11% in July

By Jeremy Bowman – Aug 6, 2021 at 11:54PM

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

Heavy losses in its second-quarter earnings report contributed to the sell-off.

What happened

Shares of Teladoc (TDOC -3.40%) slipped last month after the telehealth specialist posted a disappointing earnings report and fell earlier in the month, though there was little news out on the stock. 

According to data from S&P Global Market Intelligence, the stock finished the month down 11%. The chart below shows its performance over the month.

TDOC Chart

TDOC data by YCharts

So what

Teladoc was an early winner during the pandemic, but it's down substantially over the last year on concerns about its valuation and ability to turn a profit, and the second quarter was a reminder of that.

An adult and a child videoconferencing with a medical professional.

Image source: Teladoc.

In the second-quarter report, Teladoc posted another round of strong revenue growth aided by the acquisition of Livongo and InTouch Health a year ago. Sales jumped 109% to $503 million, which edged out estimates at $500.1 million, but the company again posted a wide loss on the bottom line. On a generally accepted accounting principles (GAAP) basis, Teladoc lost $0.86 per share, worse than the consensus at $0.56, and shares outstanding doubled over the past year so its actual net loss expanded from $25.7 million to $133.8 million. 

Adjusted EBITDA, however, rose from $26.3 million to $66.8 million, showing, in part, the impact of share-based compensation. Paid membership was essentially flat in the quarter, showing some challenges as the company laps the lockdown quarter a year ago.

CEO Jason Gorevic said, "We have solid momentum heading into the second half as the market embraces the unified care experience that only Teladoc Health has the breadth and scale to achieve."

Now what

Teladoc fell as much as 12% after the earnings report, though it recouped all those losses that day as some investors saw the sell-off as a buying opportunity for the healthcare stock. Still, analysts generally lowered their price targets on the news as Teladoc's guidance also called for wider losses than expected. It sees net loss of $0.68 to $0.78 and revenue of $510 million to $520 million in the third quarter, representing modest sequential growth on the bottom line.

Jeremy Bowman owns shares of Teladoc Health. 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
$27.60 (-3.40%) $0.97

*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 11/26/2022.

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.