Shares of Teladoc Health (NYSE: TDOC) are jumping today, up 4.9% as of 10:56 a.m. ET. The gains appear to be the result of investors buying on the dip after Teladoc stock plunged last week due to its disappointing second-quarter update.
One famous investor is definitely taking advantage of Teladoc’s lower price. Ark Invest founder and CEO Cathie Wood bought over 264,000 shares of the virtual care provider on July 28 for her Ark Innovation ETF.
Teladoc reported another huge net loss in Q2, as well as slowing revenue growth. It’s not surprising that the telehealth stock sank last week. But there’s a reason why Wood and other investors have stepped in to scoop up shares at lower prices.
There were some bright spots in Teladoc’s Q2 update. The company’s revenue was better than expected. Teladoc delivered solid membership and visit growth. Its margins also improved. Adjusting for another major goodwill impairment related to the acquisition of Livongo, Teladoc’s bottom line even continued to trend toward profitability.
Investors could also be encouraged by Teladoc CEO Jason Gorevic’s comment in the company’s Q2 call that there are “twice as many multimillion dollar deals in the pipeline” as there were at the same time last year. However, Gorevic also noted that it’s taking longer to close deals in part due to economic uncertainty.
Teladoc stock is likely to remain highly volatile going forward. The company still faces headwinds, including increased competition for its BetterHelp mental health platform and macroeconomic concerns.