What happened
For the second day in a row, Teladoc Health (TDOC -0.43%) health was looking rather sickly on Thursday. Investors traded the telemedicine specialist's shares down by more than 5%, following an aggressive price target cut from an analyst.
So what
That analyst was Oppenheimer's Mohan Naidu, who, before market open, took an axe to his price target on Teladoc stock by reducing it to $37 per share from his previous level of $45. That doesn't mean he's bearish on the bellwether telemedicine company, though -- he's maintaining his outperform (buy, in other words) recommendation on it.
It wasn't apparent why he did so, but it doesn't seem coincidental. The move followed Wednesday's disclosure by the company in a regulatory filing that it was enacting a restructuring plan. This will see it lay off around 300 workers and reduce its office space footprint.
In a letter to employees attached to that filing, CEO Jason Gorevic wrote that "First, we are removing some redundant roles as our merged organizations operate more as one Teladoc Health." In late 2020, the company completed its blockbuster, $18.5 billion merger with peer Livongo Health.
"Second, as we've discussed over the past several months and seen across our industry, businesses like ours must transition to more balanced growth of revenue and profitability," Gorevic added.
Now what
And that might be the rub, as despite the popularity of its offerings, Teladoc has been habitually, and at times deeply, unprofitable. In its most recently reported quarter, for example, it lost more than $73 million on revenue of just over $611 million.
