What happened
Teladoc Health (TDOC 3.31%) shareholders lost ground to the market last month as their stock dove 32% compared to a 0.8% decline in the S&P 500. According to data from S&P Global Market Intelligence, the slump helped push shares down over 50% so far in 2021 compared to an over 22% spike in the wider market.
So what
Teladoc had been a favorite on Wall Street during the earlier phases of the pandemic, but sentiment turned against the virtual care specialist as social distancing efforts eased. Investors sold shares off during last month's move against high-growth tech stocks, too.
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Finally, more selling pressure came as Teladoc's management team updated its short-term outlook in mid-November without boosting that forecast. Investors were hoping to hear a more bullish prediction about the close of fiscal 2021.
Now what
Management is still expecting sales to land just over $2 billion this year, which would mark over 80% growth following soaring results in 2020. Teladoc's long-term outlook is even brighter. Assuming it can leverage its leadership position in the quickly growing virtual healthcare market, the company sees room to add new services even as it expands its footprint into more doctors' offices. Teladoc currently counts roughly 10,000 providers and over 76 million members in the U.S. market but could dramatically expand those figures over time.
Investors will want to watch engagement trends over the next few quarters for signs that the company is still providing a valuable, in-demand service. So far there has been no hint of weakness on this score.
In fact, customer satisfaction is high as consumers enjoy the extra convenience of virtual doctors' appointments. Teladoc should benefit from even more consumer acceptance over time, especially as technology like wearables begins to support more complete health monitoring and evaluation.
Those growth wins may not show up as quickly as Wall Street would like, but shareholders shouldn't let that short-term thinking deter them from Teladoc stock. The company is positioned well in a growth industry and has many avenues available for future sales gains. Thus, investors might consider establishing a position following the recent plunge while they wait for the business to grow far beyond its current $2 billion annual sales footprint.
