Should Investors Be Worried About Teladoc Stock?

There's no way around it. Shares of Teladoc Health (TDOC -0.07%) have had an abysmal year. In fact, the stock is down more than 50% year to date.

But as is often true, share price doesn't tell the whole story. And in Teladoc's case, the healthcare company is continuing to thrive more than one year on from the height of the pandemic, with robust revenue and membership growth. In this segment of Backstage Pass, recorded on Nov. 19, Fool contributors Toby Bordelon and Rachel Warren respond to members' questions about Teladoc's recent share price declines. 

Toby Bordelon: FoolFans asked, "Any thoughts on Teladoc based on the latest news yesterday?" and then Robin asked a question about Teladoc this week. There are a couple of people who are interested in that.

Rachel Warren: Yeah. Yesterday was Teladoc's Investor Day and essentially, the company released their projections for 2022. They're anticipating revenue of $2.6 billion next year, and they also expect to double 2021's revenue by 2024, at which point, they expect to hit $4 billion of annual sales.

This is all sounding really good stuff. I think where the stock was reacting and I got a notification today on my trading platform of, oh, Teladoc is down, I think something like 5% today, was essentially, Teladoc's projections, which were excellent. Again, they didn't lower guidance for this year or anything.

But they came in slightly below what analysts were projecting, and I think that was the sticking point for some investors. But other than that, there was really nothing in terms of alarm bells that went off from their Investor Day.

They have consistently increased their guidance this year if memory serves correctly, and their most recent earnings report was really just another exceptional quarter of growth that is continuing to be above and beyond what they were reporting even at the height of the pandemic. I'm not concerned about this.

I think that this is another example of what we've been seeing a lot lately with a little bit of overreaction in the market to news, and there's nothing I've seen here from their Investor's Day or certainly in their most recent report that caused me any alarm. But yeah, essentially, their guidance came in slightly below what analysts were projecting and so the stock got a little wonky today.

Bordelon: Cool. Thanks for that. It looks like, what is it? About less than a $19 billion company $18.75 billion, I think is the market cap I'm looking at it now. Is it more than a $20 billion company in five years? I think it probably is, if things go well.

Warren: Yeah.

Bordelon: I think there's opportunity here. If you believe in the telemedicine space, I think there's no reason not to.

Warren: I do. I personally do. [laughs] As an investor, I definitely do. [laughs]

Bordelon: It's not cheap, but you look at what they're doing and the potential there, I think you could over $20 billion, maybe even more of $25 billion or $30 billion, that wouldn't shock me to see this company double in the next five to 10 years for sure.

Yeah, if you're interested in the company maybe take a look at it, there's a lot of analysis from various Fool services on this, it's recommended in a few, I believe. I think we also may be seeing, too, as you said with just a lot of companies is may be getting our expectations back to earth to some degree [laughs] with some of this.

That's fine. This happens, this is the cycle it goes on. We get ahead of ourselves, we get too excited. We start to face reality, we can't grow 20% forever, and the stock comes down off of that. That's the day-to-day, month-to-month fluctuations. But like you, I don't see a lot of huge concern in the business. I think I'm pretty excited about what they can do.

Warren: Yeah, me too.

Bordelon: Yeah.