Teladoc Health Stock Price Down 29% in 2022 – Time to Buy TDOC Stock?

The sell-off in growth stocks has shown little signs of abating. Teladoc Health (TDOC) stock is now down almost 29% in 2022 and is underperforming the markets by a wide margin.

TDOC stock is now down 78% from its 52-week highs and is among the worst-performing stay-at-home stocks as high-flying names like Zoom Video Communications and Chegg have been grounded amid the pivot from growth to value stocks. What’s the forecast for Teladoc Health and should you buy the dip in the stock?

Teladoc Health stock recent developments

Teladoc Health released its fourth-quarter earnings yesterday after the markets closed. Its revenues increased 45% YoY to $554.2 million and were ahead of the $547 million that analysts were expecting. In the full year 2021, it reported revenues of $2.03 billion, which were 86% higher than the previous year.

TDOC reported access fees revenues of $469.9 million in the quarter, which was 51% higher than the corresponding period last year. The company’s visits fee revenues increased 21% to $68.9 million over the period. Its revenues in the US, which is its largest market, increased 45% to $482.9 million while international revenues increased 21% to $68.9 million.

68% of all retail investor accounts lose money when trading CFDs with this provider.

TDOC reported better than expected earnings

Along with posting a beat on the topline, TDOC also reported better-than-expected earnings. Its adjusted net loss of 7 cents was way below the 57 cents that analysts were expecting. The losses also narrowed sharply from the $3.07 that it had posted in the corresponding period last year.

“Healthcare has a ‘new normal’ resulting from the pandemic’s intersection of health needs and virtual solutions that has forever changed the experience of healthcare,” said TDOC CEO Jason Gorevic. He added, “We are proud of the role Teladoc Health has played in leading this transformation and are equally excited about our role in 2022 and beyond as we continue to innovate, further evolving whole-person care, introducing new services like Chronic Care Complete, expanding into new markets and deepening our relationships with our clients and consumers.”

Teladoc Health guidance

Meanwhile, TDOC’s guidance somewhat disappointed, and it expects to post revenues between $2.55-$2.65 billion in 2022 which would mean a YoY growth of between 25-30%. The guidance was barely in line at the top end of the guidance. In 2022, the company expects to post an EBITDA between $18-$48 million. However, it expects to post a loss per share between $1.40-$1.60. It expects to end the year with total US memberships of 54-56 million while the total visits are expected between 18.5-20 million.

In the first quarter of 2022, Teladoc Health expects to post revenues between $565-$571 million. It expects to post an EBITDA loss between $16-$23 million while the per-share loss is expected between 50-60 cents.

TDOC stock forecast

Wall Street analysts have a split rating on Teladoc Health and have been gradually revising their target prices. Of the 29 analysts covering TDOC stock, 17 rate it as a buy while 12 have a hold rating. TDOC’s median target price of $110 is a premium of 68.5% over current prices. The street high target price of $215 implies an upside of 230% while the street low target price of $70 is a premium of 7.2%.

Cathie Wood of ARK has been among the biggest backers of TDOC stock and it is the second-biggest holding in her ARK Innovation ETF (ARKK). ARKK has been falling to newer lows amid the sell-off in its holdings, including Tesla. Wood continues to remain bullish on her stocks and believes that they offer great long-term value after the crash. Her bullishness hasn’t paid off as growth names, including her favorite stocks have been falling to newer lows.

BTIG downgraded TDOC stock in November

In November, BTIG downgraded Teladoc Health stock from a buy to neutral. It said, “While the revenue CAGR is expected to be ~25-30% over that same time-frame, we are disappointed with the membership growth expectations. Our view is that membership is the most leading indicator of long-term growth. We are also disappointed that there doesn’t seem to be an aggressive, ‘top-priority’ effort to grow international membership.”

After TDOC’s earnings release, KeyCorp lowered its target price from $180 to $100 while SVB Leerink lowered its from $193 to $161. Markets have been apprehensive of loss-making stay-at-home companies like Teladoc Health and analysts have also been lowering their target prices amid the changed realities.

Teladoc Health stock long term forecast

The long-term forecast for Teladoc Health stock looks positive as the healthcare market also moves towards digitization. Wells Fargo estimates the company’s total addressable market at $120 billion and forecasts an organic annualized revenue growth in excess of 20% for the next five years.

Also, international expansion and mental health are expected to be the two key long-term drivers for the company. However, in the short term, the general pessimism towards loss-making companies might continue to put pressure on TDOC stock.

Should you buy TDOC stock?

TDOC stock bounced back from the lows yesterday but again looks to slide today. The stock is looking bearish on the charts and is in a clear downtrend, falling below all key moving averages. However, if you can take a long-term view, the valuations appear reasonable.

TDOC stock is now trading at the lowest levels since 2019. While a lot of stay-at-home stocks are still above their pre-pandemic price levels, Teladoc Health stock has even fallen below those levels. The stock now trades at an NTM (next-12 months) EV-to-sales multiple of 4.5x, which looks reasonable considering the risk-reward dynamics.

Buy TDOC Stock at eToro from just $50 Now!