Teladoc (NYSE: TDOC) stock price has been one of the worst performers in Wall Street in the past few years. It peaked at $307 in 2021 as most Americans embraced telehealth services.
Today, the stock has collapsed to just $13, a move that has cost its investors billions of dollars. If you invested $10,000 in the company at its peak, you would now have less than $500. Its market cap has fallen from over $46 billion to about $2.3 billion.
Teladoc Health earnings aheadTeladoc Health has had a remarkable fall from grace as demand for the telehealth industry has fizzled after the COVID-19 pandemic.
The company made a few mistakes in its happier times. Its biggest one was to acquire Livongo Health, another telehealth company in a deal valued at over $18 billion.
The merger was ill-timed, which pushed its business to a net loss of over $13 billion in 2022 as it wrote down its valuation.
Its growth trajectory has fizzled and this trend may continue in the coming years. The most recent results revealed that Teladoc Health’s revenue rose by 4% in the fourth quarter and by 8% in 2023. It made $660 million in the quarter and delivered a net loss of over $28 million.
I believe that the company’s business will continue facing challenges in the next few years as the number of people seeking telehealth services fall. This explains why UnitedHealth, the biggest insurer in the US, has decided to wind down Optum’s telehealth business.
Most importantly, BetterHelp, its online therapy solution is also not growing. Its revenue in the fourth quarter was $276 million, down from $277 million in the same quarter a year earlier.
Looking ahead, the company is set to publish its financial results on Thursday. In its last quarter’s financial release, the company’s revenue moved to between $630 million and $645 million. It expects that its net loss per share will be between 55 and 45 cents.
The average estimate by 25 analysts tracking the company is that its revenue will come in at $637 million this quarter followed by $662 million in Q2. Most of these analysts have a hold rating on the company with an average stock estimate of $19.55, higher than the current $13.73.
Teladoc stock price forecast
It is always difficult to predict a stock’s performance before earnings. For example, Teladoc’s stock crashed hard after publishing its last two financial results. But it also jumped by over 30% when it released its numbers in July last year.
Turning to the daily chart, we see that the TDOC stock price has collapsed hard in the past few monthS. It crashed below the important support at $15, its lowest point on October 30th.
The stock has remained below all moving averages and the Ichimoku cloud indicator. The Relative Strength Index (RSI) has pointed upwards and is nearing the neutral point of 50.
Therefore, the outlook for the stock is neutral, with the key support and resistance levels to watch being at $12.82 and $15.05.
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