Why Teladoc Stock Crashed Today

Teladoc (TDOC -23.67%) stock got crushed in Wednesday’s trading session. The online healthcare specialist’s share price ended the day’s trading down 23.7%, according to data from S&P Global Market Intelligence.

Teladoc released its Q4 results after the market closed yesterday and actually posted a loss for the period that was significantly smaller than expected. But the company’s sales performance for the quarter missed Wall Street’s target, and management issued disappointing forward guidance. The stock is now down roughly 49% over the last year, and it trades 95% off its peak level.

Teladoc’s growth has slowed to a crawl

Teladoc posted a per-share loss of $0.17 on sales of $660.53 million in the fourth quarter. Meanwhile, the average analyst estimate had called for the business to post a loss per share of $0.24 on revenue of roughly $670.1 million.

Teladoc’s sales increased just 3.6% year over year in Q4, marking another quarter of substantial deceleration for sales growth. For reference, the company’s revenue increased 15% year over year in Q4 2022 and 45% year over year in Q4 2021 thanks to pandemic-related tailwinds and the company’s acquisition of Livongo.

Unfortunately, Teladoc shelled out roughly $18.5 billion to acquire Livongo in 2020, and the combined company’s sales growth has now nearly stalled. Teladoc has already taken massive write-offs related to the Livongo acquisition, and the company’s overall health and outlook are looking increasingly gloomy on the heels of its Q4 report.

What comes next for Teladoc?

For the first quarter of this year, Teladoc is guiding for sales between $630 million and $645 million. At the midpoint of the guidance range, that would mean posting sales growth of 1.3% year over year. The average Wall Street target had called for sales of $672.95 million.

On the earnings front, the company is guiding for a loss per share between $0.45 and $0.55. The average analyst estimate had called for a loss per share of $0.37. So even though Teladoc’s loss came in lower than expected in Q4, its guidance suggests that last quarter’s beat will more than be erased this quarter.

For the full-year period, management is targeting revenue between $2.635 million and $2.735 million. Meanwhile, the average analyst estimate had called for sales of $2.77 billion. If Teladoc were to hit the midpoint of its sales guidance, revenue would be up roughly 3% annually. For reference, the business grew sales 8% annually in 2023.

All in all, there was very little to like in Teladoc’s Q4 report. With signs that growth will continue to slow and indications that losses may come in significantly higher than previously anticipated, it’s not surprising that shares cratered today.

Keith Noonan 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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