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Why Teladoc Health Stock Fell Today

By Keith Speights – Dec 22, 2021 at 10:21AM

Key Points

  • Investors are less bullish about Teladoc, with concerns about the omicron variant decreasing.
  • The FDA authorization of Pfizer's COVID-19 pill appeared to especially impact Teladoc stock.
  • Teladoc has other growth drivers, regardless of the omicron-variant's impact.

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Reduced concerns about the omicron variant caused the virtual-care stock to slip.

What happened

Shares of Teladoc Health (TDOC -0.77%) were falling 3.2% as of 2:42 p.m. ET on Wednesday. The decline appeared to be linked to reduced concerns about the impact of the coronavirus omicron variant.

So far, the highly contagious coronavirus strain appears to be less severe than previous variants. Teladoc's shares really began to tumble, though, after news broke that the U.S. Food and Drug Administration (FDA) has granted Emergency Use Authorization (EUA) to Pfizer's (PFE 1.77%) COVID-19 pill, Paxlovid.

A person holding a smartphone showing a healthcare professional.

Image source: Getty Images.

So what

It's understandable why investors would be less bullish about Teladoc over the near term, with omicron-variant fears easing. The healthcare stock would almost certainly be a winner if more people turned to virtual care with a worsening pandemic.

There's an argument to be made, though, that the FDA's EUA of Pfizer's COVID-19 pill could work to Teladoc's benefit. Individuals who test positive with an at-home COVID-19 test may prefer a virtual-care visit to obtain a prescription for Paxlovid rather than going to a physician's office.

Regardless, the impact of the omicron variant shouldn't diminish the long-term prospects for Teladoc. Demand should remain strong for the company's virtual-care services, including telehealth and digital health management for chronic diseases, even after the pandemic is over.

Now what

The omicron variant could still prove to be a tailwind for Teladoc over the next few months. However, the company also has other growth drivers on the way, notably including a major contract with the nation's fifth-largest health insurer HCSC, which goes into effect in January.

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

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