What happened
Shares of Teladoc Health (TDOC -0.82%) were gaining Wednesday as investors looked ahead to the company's third-quarter earnings report, which will be released after the market closes. There was no specific news out regarding the telehealth company, but analyst chatter seemed to be giving it a boost, and the session's gains could reflect a belief in the market that the stock is oversold after falling more than 90% from its peak last year.
As of 11:53 a.m. ET, Teladoc stock was up by 4%.
So what
Showing how low the bar has been set for this healthcare stock, Citigroup analyst Daniel Grosslight said in a note Tuesday that it could rally if it just meets Q3 expectations and reduces its guidance only slightly.
Three months ago, Teladoc management guided for between $600 million and $620 million in revenue for Q3 -- Grosslight predicted that its top-line result would exceed that range. He also expects its adjusted EBITDA will land near the midpoint of its $35 million to $45 million guidance range. The analyst said that would be enough to drive the stock up by 5% or more. He maintained a neutral rating on the stock and a price target of $38.
Now what
The current analyst consensus largely lines up with Teladoc's guidance, calling for 17% year-over-year revenue growth to $610 million.
Teladoc shares have plunged over the last year as its top-line growth has slowed. The company has continued to report wide losses on a GAAP basis, and it has taken nearly $10 billion in impairment write-downs this year, including $6.6 billion related to its Livongo acquisition.
Against that backdrop and with the shift in market sentiment away from growth stocks, investors will likely be looking for evidence that Teladoc is exercising financial discipline and is capable of building a profitable telehealth business.
