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Why Teladoc Health Stock Jumped Today

By Keith Speights – Nov 3, 2021 at 4:31PM

Key Points

  • Teladoc didn't announce any new developments Wednesday.
  • However, the overall stock market's gains likely buoyed Teladoc's shares.
  • Institutional investors could also be buying the stock after the company's positive Q3 update last week.

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Continued momentum from last week's third-quarter report and an up day for the broader market were the most likely reasons.

What happened

Shares of Teladoc Health (TDOC -5.33%) closed Wednesday's trading session 4.6% higher after having been up by as much as 5.4% earlier in the day. The virtual healthcare leader didn't report any new developments. So why did the stock move higher? There are two likely reasons.

First, the major market indexes chalked up solid gains, and as the old saying goes, a rising tide lifts all boats. Second, the positive momentum for the healthcare stock that began last week with Teladoc's strong third-quarter update appears to be continuing. Since the company announced its results on Oct. 27, its shares are up by more than 11%. When institutional investors rotate into a stock, they often spread their buying over several days, and sometimes several weeks. We could be seeing such a pattern here.

A person looking at a laptop displaying a smiling physician on the screen.

Image source: Getty Images.

So what

The main thing for investors to focus on with Teladoc isn't its nice gain on one day or even over several days. What's really important for the company and the share price are Teladoc's growth prospects. Those prospects appear to be bright.

Teladoc expects revenue for the full year will be between $2.015 billion and $2.025 billion. The midpoint of that range would amount to year-over-year growth of 85%. That's especially impressive considering the great performance this company delivered in 2020.

Now what

Next year could be even better. The company's contract with HCSC, the nation's fifth-largest health insurer, goes into effect in January. Teladoc also expects that its new Primary360 virtual primary care product will drive growth.

Keith Speights owns shares of Teladoc Health. The Motley Fool owns shares of and recommends Teladoc Health. The Motley Fool has a disclosure policy.

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