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Why Teladoc Stock Slid Sharply on Thursday

By Daniel Sparks – Nov 18, 2021 at 5:14PM

Key Points

  • Teladoc maintained its full-year revenue outlook from a few weeks ago and said it expects a huge jump in revenue in fiscal 2022.
  • Management expects annual revenue to top $4 billion by fiscal 2024.

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Financial forecasts in the company's Investor Day presentation didn't impress.

What happened

Shares of telehealth specialist Teladoc Health (TDOC -2.05%) took a hit on Thursday. The company's shares declined as much as 9.9% but were down 8% by the time the market closed.

The stock's decline came as the company released some forecasts as part of its Investor Day. While the metrics provided were largely in line (and in some cases even better) than current analyst estimates, investors may have been hoping for a more exciting outlook from management.

A chart showing a stock price falling.

Image source: Getty Images.

So what

Teladoc guided for fiscal 2022 revenue of $2.6 billion, up from analysts' forecast for just over $2 billion in revenue this fiscal year. This forecast was slightly ahead of analysts' average forecast for fiscal 2022 revenue of $2.58 billion. Looking out longer term, the company said it expects fiscal 2024 revenue to cross $4 billion, translating to a compound average growth rate of 25% to 30%.

Perhaps the point in the presentation that disappointed investors was management's view for fiscal 2021 revenue of $2.015 billion to $2.025 billion. The low end of this guidance range is below analysts' average forecast for fiscal 2021 revenue, or $2.02 billion.

Now what

Investors shouldn't get too hung up on what may seem like underwhelming forecasts relative to analysts' estimates. Overall, it's good news to hear that management expects significant growth over the next few years. This suggests the company is confident in its long-term strategy to make progress on monetizing the $261 billion addressable market it's going after in the U.S. 

Further, it's not like Teladoc lowered its full-year revenue forecast. The forecast is in line with what it already guided for just a few weeks ago.

Daniel Sparks has no position in any of the stocks mentioned. His clients may own shares of the companies mentioned. The Motley Fool owns shares of and recommends Teladoc Health. The Motley Fool has a disclosure policy.

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