What happened
Teladoc Health's (TDOC +1.00%) stock wasn't the picture of financial health Wednesday. Investors traded it down by nearly 9%, after an analyst dinged the shares with a recommendation downgrade.
So what
That analyst, Sandy Draper of Guggenheim, downgraded his Teladoc recommendation to sell from the previous neutral, with a price target of $25 per share. Even after Wednesday's drop, that implies more than 30% downside to the stock's level.
Draper feels that Teladoc remains overly exposed to the consumer segment, as it derives roughly 40% of its revenue from such users. A strong dollar also won't help; as a telehealth services provider, of course it's not particularly constrained by borders. As for business spending, the analyst wrote of a "challenging macro environment that is elongating sales cycles in enterprise decisions."
Teladoc is a star healthcare stock that has lost its shine. It was a hot item in the thick of the coronavirus pandemic, as telehealth solutions became a viable option in a world of shut-ins and office closures. Recent quarterly earnings disappointments compound the feeling among certain investors that the company's best days are behind it.
NYSE: TDOC
Key Data Points
Now what
It's important to note, though, that Teladoc still has more than a few believers. This crowd includes a number of analysts, some of whom are unhesitatingly bullish. One is D.A. Davidson's Robert Simmons, who late last week initiated coverage of Teladoc stock with a buy recommendation at a price target of $45 per share. In a research note, Simmons opined that the scale and variety in telehealth the company has achieved will continue to power its growth in the future.
