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New York-headquartered Teladoc Health (NYSE:TDOC) is a telemedicine specialist that seemed to offer great promise during 2020’s emergence of the Covid-19 pandemic. While TDOC stock did have its glory days, they’re in the rear-view mirror. As a result, it’s wise to avoid it now.
Even if you believe in the future of telemedicine, you don’t need to make a bet on Teladoc. Its financial problems suggest it may not come out on top. Whether virtual healthcare has a strong future or not, Teladoc just isn’t the right business to bet your hard-earned money on.
What’s Happening With TDOC Stock?
TDOC stock was worth $174.32 at one point during the past 12 months, yet it recently slid into the $30 range. This isn’t a good sign for a stock that was once a promising pandemic play.
Now, don’t get the wrong idea. Covid-19 is still a major issue in the world. There’s also a monkeypox outbreak to contend with. These health threats may tempt some traders to load up on Teladoc shares.
Moreover, you might have read the top-line bullet point that Teladoc generated $565.4 million in first-quarter 2022 revenue. Don’t neglect to read the rest of the press release.
In it, you’ll discover the harsh truth that Teladoc’s net loss per share was $41.58 for the quarter. This is unsettling, as $41.58 was higher than the TDOC share price as of May 27.
Teladoc Remains Unprofitable
Looking at it from another angle, Teladoc sustained a first-quarter 2022 loss from operations of $6.67 billion. This and the $41.58-per-share loss were attributable, in large part, to Teladoc’s $6.6 billion goodwill impairment write-down.
In the press release, Teladoc emphasized the $6.6 billion “non-cash goodwill impairment charge,” but let’s dig deeper. Even if we subtract the $6.6 billion, we’ll find that Teladoc Health racked up $634.7 million worth of expenses ($7.23 billion – $6.6 billion) while only generating $565.4 million in quarterly revenue.
Hence, Teladoc is still not profitable, no matter how you slice it. It is also discouraging that the company lowered its full-year 2022 revenue guidance from a range of $2.55 billion to $2.65 billion, to a range of $2.4 billion to $2.5 billion.
Teladoc Health CEO Jason Gorevic seemed unfazed, at least in the press release. “Despite the revision to our 2022 outlook, we are confident in our strategy, along with our breadth and depth of capabilities, which empower people everywhere to live healthier lives,” Gorevic said.
Given the aforementioned financial figures, however, perhaps Gorevic ought to be concerned, not confident.
The Bottom Line: Stay Away From TDOC
Prospective investors shouldn’t share Gorevic’s confidence while Teladoc Health is unprofitable and reducing its revenue guidance. Suffice it to say, then, that the best outlook now is a cautious one.
This doesn’t mean that the telehealth market is in trouble. It only goes to show that a market can look promising, but each company should be carefully vetted, and sometimes, rejected.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
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