Is This Beaten-Down Tech Stock Worth Buying?

Teladoc Health (TDOC -2.37%) is disrupting the healthcare industry. Its virtual-first platform connects patients with clinicians across a broad range specialties, from primary care to chronic illnesses, making the experience more convenient and less costly. However, Teladoc shareholders have had a rough year -- despite strong sales growth in the first half of 2021, the stock price has fallen 53% from its all-time high.

In this Motley Fool Live video, which was recorded on Oct. 14, 2021, Fool.com contributor Rachel Warren shares her thoughts on Teladoc's upcoming third-quarter earnings report, which is scheduled for October 27. Rachel also explains her lasting conviction in this beaten-down tech stock.

Rachel Warren: My number two is Teladoc, and I talk about the stock all the time. I've said this before, I'll say it again. I just feel it has not been getting a lot of love from the market lately. And I think, kid of similarly to what happened with the investor consensus regarding Pinterest (PINS -1.52%), Teladoc had a really strong history of revenue growth and balance-sheet growth before the pandemic. Then, of course, many people were rushing to use its platform and services, being stuck at home, and it has continued to generate great growth across all of those key metrics, even in 2021. But I think that there has been a mixed consensus among investors regarding how much runway does it have left?

I personally think that Teladoc has a lot of room to grow. It is the number-one presence in the multi-billion-dollar global telehealth industry. Yes, there's other contenders in the space, but none of them have the market share or user base or even brand authority that Teladoc does.

What I was talking about, shares of Teladoc are down about 30% year-to-date. But again, I think that this is a great opportunity to get a company like this on sale. I am a Teladoc shareholder. When I invested, the stock was trading down year-to-date and I thought it was a great opportunity to take advantage of that bargain price.

Going to the company's most recent quarterly report, which would have been for the second quarter. It is about to report its earnings for the third quarter on October 27th. Just in a little bit here. In the second quarter of 2021, revenue was up 109% year-over-year, and second-quarter visits were up 28% on its platform compared to the second quarter of 2020, which as I think everyone will recall was the first wave of the pandemic. I think that number in particular is really important to note, because essentially Teladoc was seeing almost 30% growth in visits compared to the first wave of the pandemic. It's still marking this really great business growth.

Its adjusted EBITDA during the second quarter was up 154% year-over-year. Just really astounding metrics. It has released its guidance for the upcoming quarter, it's expecting revenue between $510 million and $520 million. Just to give you an idea of what a big deal that is, its revenue in the third quarter of 2020 was only about $289 million. It is expecting, again, a really big year-over-year jump in revenue in the third quarter.

I think that this is just a great company. It's continuing to build upon the track record of growth that it had established before the pandemic. I think that share price fluctuations, especially in the volatile market environment we're seeing, is something to be expected. I think you have a lot of investors that are buy-and-hold investors, and then you have a lot of retail investors in the market that are maybe looking more for those get-rich-quick stocks, maybe then companies like this sort of see the downside of that, but I think this is a great stock and I'm excited to see what they have to say for the third quarter.