Teladoc Health stock: extremely oversold, rebound likely

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Teladoc Health (NYSE: TDOC) stock price crash continued this week as it plunged to its record low. It dropped to a low of $8.75, bringing the year-to-date losses to 60%. It has lost over 97% of its value from its all-time high as its market cap has dropped from over $46 billion to $1.5 billion. 

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Why Teladoc has imploded


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Teladoc Health has been one of the worst-performing companies in Wall Street in the past few years. It has erased all gains it made during the pandemic as demand for telehealth rose in the US and internationally.

The company has struggled as demand for telehealth has waned and its Livongo Health acquisition left it highly in debt. Its long-term debt has jumped from over $440 million in 2019 to over $1.59 billion.

Its revenue growth has struggled while competition in the industry has intensified. Some of the top competitors are companies like Amwell, PlushCare, and UpHealth. 

The most recent financial results showed that its revenue rose by just 3% in the first quarter to $646 million. Its net loss jumped by 18% to $81 million while its adjusted EBITDA rose by 20% to $63 million.

Teladoc Health’s crucial BetterHelp segment is also not doing well even after spending millions in advertising and as mental issues rise. Its revenue dropped from $279 million in Q1’23 to $269 million in Q1’24. Its adjusted EBITDA also moved to $18 million. 

This division was partially offset by the performance of the Integrated Care Segment whose revenue rose from $350 million to $377 million. Also, its American and international segments are not doing well.

Analysts are less enthusiastic about Teladoc Health’s performance. The average estimate from 23 analysts is that its revenue will rise by just 0.20% to $650 million. For the year, they expect that its revenue will rise by just 2.20% to $2.66 billion. 

Analysts at Evercore, JPMorgan, Bank of America, Wells Fargo, and Oppenheimer have moved their ratings to neutral. 

Is Teladoc a bargain?


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Teladoc’s stock performance has led to a dilemma among investors. Some investors, including Cathie Wood, believes that it is a bargain that will ultimately bounce back. Ark Invest holds over 16 million shares in Teladoc, making it the second-biggest holder after Vanguard.

Other investors believe that Teladoc Health stock price has more downside to go, which explains why it has a short interest of about 16%. 

I believe that Teladoc Health has a strong market share in the telehealth industry, which is expected to have a role in the future. 

Further, the company’s performance has been quite stable even as demand has waned. Data shows that its net loss moved from $485 million in 2020 to $428 million to $428 million in 2021. Losses then soared to $13.6 billion in 2022 because of its Livongo Health writedown. 

Its loss came in at $220 million in 2023, meaning that it is moving in the right direction. Also, the company has become relatively undervalued as it trades at a price-to-sales ratio of 0.58. 

Teladoc stock price analysis


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TDOC chart by TradingView

The weekly chart shows that the TDOC share price has been in a strong sell-off after peaking at $307.80 in February 2021. It has remained below all moving averages, meaning that bears are in control.

Oscillators like the Relative Strength Index (RSI) and the Stochastic Oscillator have moved to the extreme oversold level. Therefore, with the pessimism continuing, there is a likelihood that the Teladoc stock price will bounce back after it publishes its financial results on July 27th. If this happens, the stock will likely rise above $10.


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