Teladoc Stock Plummets to 4-Year Low After Dismal Full-Year Forecast

Analysts were quick to chime in with bear notes

Digital Content Manager
Apr 28, 2022 at 9:49 AM
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While a number of names on Wall Street have provided traders with upbeat quarterly results this morning, Teladoc Health Inc (NYSE:TDOC) is not one of them. In fact, the online medicine company last night announced that it took an impairment charge topping $6.5 billion, leading it to cut its full-year forecast. While Teladoc did post a slimmer-than-expected loss of 47 cents per share for its first quarter, its revenue of $565.35 million missed expectations, noting that higher costs in the direct-to-consumer mental health market negatively impacted the company's marketing spend, overshadowing the growth of its mental health business. 

No less than 10 analysts have slashed their price targets already. This includes Credit Suisse, which lowered its price objective all the way to $35 from $114, and downgraded Teladoc stock to "neutral" from "outperform." Plus, Guggenheim, which initiated coverage on TDOC a few weeks ago, already slashed its rating "neutral" from "buy." 

The 12-month consensus price target of $79.63 is still a 155.3% premium to Wednesday's close, leaving room for even more price-target cuts. Downgrades could be imminent too, as 12 of the 19 in coverage considered TDOC a "buy" or better, heading into today. 

All of this news has culminated in Teladoc stock hitting a fresh four-year low, last seen down a whopping 43.8% to trade at $31.87 before the bell. The equity has been on a downward slide since February 2021, when it hit a record high of $308. The stock has caved to pressure at all short- and long-term trendlines, including its 180-day moving average, which rejected its early November rally, and most recently its 10-day moving average. 

Prior to today, options traders were already bearish. This is per TDOC's Schaeffer's put/call volume ratio (SOIR) of 1.31, which sits higher than 88% of readings from the past year. In other words, short-term options traders have rarely been more put-biased. 

Similarly, 1.58 puts were picked up for every call at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) during the past two weeks. This ratio stands in the 96th percentile of its 12-month range, implying a healthier-than-usual appetite for long puts in recent weeks. 

Short sellers are also firmly in control. Short interest has inched 2.4% in the last reporting period, and the 25.50 million shares sold short make up 16% of the stock's available float, or over a week's worth of pent-up buying power. 

 

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