A lot has changed for Teladoc Health (TDOC 4.15%) since the company's IPO in 2015. Today the telehealth company has far more patients, generates more revenue, and offers more services than ever.

Yet a $10,000 investment in its IPO would only be worth $8,602 today. So what went wrong? The stock is still reeling from management's dramatic misstep in overpaying for Livongo in 2020.

They say that fundamentals drive share prices over time, so is Teladoc a bad apple, given its lack of performance over so many years? Or are things looking up for shareholders? Here is what you need to know.

Teladoc's mistake cost shareholders big

Teladoc spent years as a telehealth company, where patients could meet with healthcare professionals digitally. Its evolution into a complete digital healthcare company led it to acquire Livongo in 2020, which specialized in monitoring chronic health conditions like diabetes. Teladoc paid a whopping $18.5 billion for Livongo, which blew up in management's face.

Not only did Teladoc fund the acquisition by borrowing money and issuing new shares, hurting the balance sheet and lowering the value of existing shares, but Teladoc overpaid to the degree that it's since written off most of Livongo's value. There is only $1 billion left in goodwill on Teladoc's books, and its entire market cap is just $4 billion, a fraction of the amount it paid for Livongo.

So it's not like Teladoc's share price hasn't moved since its IPO. Instead, it has collapsed from its former highs, falling 91% to where it trades today. It's been a gut-wrenching roller-coaster, and one wouldn't blame shareholders for being upset -- and such an enormous mistake can put stocks in the doghouse.

But signs of a recovery are showing

What happens moving forward matters most at this point. Investors can think of Teladoc as a clean slate now that the write-offs are mainly in the past, and there are still some solid business fundamentals you can hang your hat on.

The company has 84.9 million paying patients in the United States, growing 7% year-over-year in the first quarter. Additionally, it's showing growth in important sub-niches, like its mental health service BetterHelp, which grew members 22% in Q1 to 467,000. Its chronic care service (Livongo) grew 13% year-over-year to surpass one million users.

Teladoc is now generating operating profits, $13 million in Q1 versus $31 million in losses the prior year. A positive bottom line is still a way off; free cash flow and net income were negative in Q1. However, things are moving in the right direction. The company has $888 million in cash, so the business is still well-funded. There is just over $2 billion in convertible debt due beginning in 2025, though, so investors should keep an eye on this too. It could dilute shareholders if that is converted to shares of stock.

Is Teladoc a buy today?

Shares of Teladoc are trading near their lowest price-to-sales ratio as a public company. However, investors should temper expectations moving forward. The company's lack of profitability and looming convertible loans could weigh on investor sentiment until it changes the narrative with better financial performance.

TDOC PS Ratio Chart

TDOC PS Ratio data by YCharts

The company's cheap valuation makes it an intriguing -- but highly speculative -- investment opportunity for patient investors. Approach cautiously due to the loans on the balance sheet and lack of cash flow to pay them down.