Teladoc Stock Cools Off Ahead of Earnings

Short sellers have been piling on the security of late

Digital Content Manager
Oct 27, 2021 at 3:26 PM
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Telemedicine concern Teladoc Health Inc (NYSE:TDOC) is taking a breather, last seen down 1.9% to trade at $138.65 this afternoon, just ahead of its third-quarter earnings report, which is due out after today's close. Below, we'll take a closer look at the equity's technical performance of late, as well as some of its previous post-earnings activity. 

On the charts, Teladoc stock has pulled back dramatically from its Feb. 16 all-time high of $308 over the last few months. And while the shares have recently bounced off the $120 level, the 80-day moving average has been pressuring the security lower since July. Year-to-date, TDOC has already shed 30.6%.

TDOC 80 Day

The equity has a mixed history of post-earnings reactions, finishing four of eight next-day sessions lower in the past two years, while the other four were higher. It did log a 15.7% pop in February 2020, however. Options traders are pricing in a 9.2% swing for Teladoc stock this time around, which is slightly higher than the 8.4% move it averaged after its last eight reports, regardless of direction.

Short sellers have been piling on the security ahead of the event. Short interest added 10.1% over the last two reporting periods, and the 19.18 million shares sold short now make up 12.8% of the stock's available float, or nearly two weeks' worth of pent-up buying power.

Meanwhile, the options pits are bullish. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), TDOC's 10-day call/put volume ratio of 3.20 sits higher than 93% of readings from the past 12 months. This suggests calls have been getting picked up at much faster-than-usual pace in the last two weeks.

It is also worth noting that Teladoc stock tends to outperform volatility expectations, which bodes well for premium buyers. This is per the security's Schaeffer's Volatility Scorecard (SVS), which sits at 80 out of 100.

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