Short sellers have been piling on the equity of late
Teladoc Health Inc (NYSE:TDOC) is down 7.3% to trade at $30.58 at last check, amid the latest tech selloff. The shares have been testing a floor at the $30 level since their May 12, roughly five-year low of $27.38, but still carry a substantial 66.7% year-to-date deficit, as the equity continues to struggle with resistance at its 20-day moving average.
Shorts have been piling on Teladoc stock of late. In fact, short interest is up 11.6% in the last two reporting periods, and the 27.80 million shares sold short account for 17.5% of the security's available float, or just over three days' worth of pent-up buying power.
The options pits also favor bearish bets. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), TDOC's 10-day put/call volume ratio of 0.87 sits higher than 89% annual readings. This suggests that while are outpacing puts on an overall basis, puts are getting picked up at a quicker-than-usual pace.
Digging deeper, the telehealth concern has produced 413% annual revenue growth, but has also experienced a $6.9 billion decrease in net income since 2018. Plus, Teladoc’s trailing 12-month revenues have increased 5.5%, while its 12-month net income has dropped $6.47 billion since 2021.
Nonetheless, at a price-sales ratio of 2.29, the security continues to offer too great of a risk for fundamental-based investors, considering TDOC’s lack of profitability, relatively average revenue growth rate, and unfavorable balance sheet.