Teladoc Health's (TDOC 0.22%) 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.
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.
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.