Why Teladoc Health Stock Dived on Friday

The onetime telehealth star’s luster continued to dim after publishing first-quarter earnings.

Like other companies that flew high during the thick of the coronavirus pandemic, Teladoc Health (TDOC -2.40%) has lost significant altitude since then. It’ll probably stay at modest levels after releasing its first-quarter financials after market hours Thursday.

In reaction the following day, investors traded out of the stock to the point where it closed more than 2% lower in price. This was in marked contrast to the S&P 500 index’s 1% rise.

Slightly higher revenue, but deeper net loss

Starting out on a positive note, Teladoc managed to grow its revenue by 3% on a year-over-year basis to $646 million for the period. Notably less encouraging was its performance on the bottom line, where according to generally accepted accounting principles (GAAP), its loss deepened. This came in at almost $82 million, a deeper shortfall than the $69 million ($0.49 per share) loss of first quarter 2023.

This meant a mixed quarter as far as the collective analyst estimates went, as those pundits were anticipating Teladoc would post revenue of slightly more than $637 million — but show a slightly narrower net loss of $0.46.

Of Teladoc’s two main divisions, integrated care’s revenue rose an encouraging 8% to over $377 million. BetterHelp went in the opposite direction though, sliding by 4% to hit $269 million.

Second-quarter guidance fell short

Teladoc also proffered guidance for its current (second) quarter. The company is forecasting $635 million to $660 million for revenue, filtering down into a per-share net loss ranging from $0.35 to $0.45. Unfortunately, neither projection meets the average analyst estimates, which are nearly $663 million for revenue and a mere $0.29 per share for net loss.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Teladoc Health. The Motley Fool has a disclosure policy.

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