Shares of Teladoc Health (NYSE: TDOC), a bellwether telehealth company, rose more than 7% this morning. The stock isn’t moving in response to relevant news about the underlying business or the telehealth industry because there is none. The stock was still up 6.95% as of 11:18 a.m. ET on Wednesday.
Teladoc Health was a stock market darling that could do no wrong during the pandemic’s early days. Now that most of us can see our doctors in person again, the demand for telehealth services has decelerated. When the company reported first-quarter results this April, management had to walk back the 2022 revenue guidance it had provided just three months earlier. Instead of a range of $2.55 billion to $2.65 billion, the company now expects total revenue to land in a range between $2.4 billion and $2.5 billion.
The midpoint of the revised revenue expectation represents a 20.5% year-over-year gain. That isn’t bad, but it doesn’t compare well to the whopping 86% gain reported in 2021.
Teladoc’s market cap has fallen from over $36 billion at its peak down to just $5.4 billion at recent prices. That’s a big drop, but we don’t know if this stock has reached a bottom yet.
The company’s inability to execute on the $18.5 billion acquisition of Livongo led to a $6.6 billion write-down in the first quarter. Livongo’s focus on chronic care was supposed to help Teladoc Health differentiate itself from a slew of competing telehealth services. While there’s a chance it can turn its ship around, it’s probably best to watch from the sidelines for now.