There’s no clear path forward for Teladoc (NYSE:TDOC), so why would investors want to put their financial health at risk? Plus, a still-fresh announcement from Teladoc (a leadership transition—more on this below) should make any prospective shareholder think twice. So, I hate to say this, but I’m currently bearish on TDOC stock.
Teladoc connects healthcare practitioners and patients online through a telehealth/telemedicine portal. The company was in the right place at the right time during the onset of the COVID-19 pandemic, when many people couldn’t easily see their doctors in person.
Fast-forward to 2024, and Teladoc doesn’t have the pandemic-lockdowns catalyst anymore. Unfortunately, after conducting a thorough checkup, Teladoc stock almost looks uninvestable at this time.
Teladoc Attempts to Find a New Catalyst
Since COVID-19 won’t be Teladoc’s growth driver in 2024, can the company find a new catalyst? Maybe the answer is yes since the trend of weight-loss treatments is red-hot this year.
Of course, Teladoc isn’t a pharmaceutical company and doesn’t sell obesity drugs. However, Teladoc managed to find an angle on this trend. Specifically, the company announced a weight-loss program that it calls Comprehensive Weight Management.
It’s not a program for just dispensing weight-loss drugs. Rather, it involves “comprehensive support from providers experienced in obesity management, health coaching, medical nutrition therapy, and integrated, highly accessible mental health support.”
Teladoc announced this program on March 7, not long after TDOC stock collapsed following a poorly-received earnings report. Truly, Teladoc needed something to resuscitate the company, as investors remained unimpressed.
Nearly a month later, Teladoc stock has basically gone nowhere and still can’t seem to get off the ground. That’s one reason I’m bearish on the stock. Teladoc is apparently doing what it can do to gain the market’s favor, but it’s just not working.
Teladoc Health Chief Medical Officer Vidya Raman-Tangella explained that the company’s Comprehensive Weight Management program involves “digitally connected smart scales, digital meal planning tools and connectivity with wearables.” That might be the problem, though. The market is obsessed with obesity drugs because, regrettably, some patients are seeking a quick and easy solution in the form of a pill.
So, maybe investors are only optimistic about obesity drug manufacturers and not the healthcare ecosystem that’s needed to support weight loss. In any case, stock traders simply aren’t buying whatever Teladoc is selling.
Teladoc’s “Leadership Transition” Is a Cause for Concern
As we’ve discovered, Teladoc appears to be struggling to find its footing in a post-pandemic world. Even latching on to the weight-loss trend might not put Teladoc on track to profits. Plus, now there’s a fresh announcement that’s a major cause for concern.
In a real shocker of a press release, Teladoc disclosed that it’s undergoing what the company calls a “leadership transition.” Personally, I would describe it as a “sudden departure” rather than as a “transition.”
After leading Teladoc for 15 years, Jason Gorevic is “departing the company, effective immediately.” The company didn’t identify Gorevic’s permanent replacement, nor did Teladoc explain his suddenly-announced exit.
It’s easy to see why this might cause consternation among Teladoc’s shareholders. They might wonder where internal strife prompted Gorevic’s departure. Additionally, Teladoc will have to exist in a state of uncertainty until the company finds a replacement for Gorevic, and that process ought to take a while.
Teladoc Reaffirms Its Financial Guidance
In the same press release, Teladoc also announced that its management “reiterated its guidance for the first quarter and full year of 2024.” To me, it felt like Teladoc was trying to be low-key with that part of the press release.
What was that guidance? Teladoc expects to report a loss of $0.45 to $0.55 per share in 2024’s first quarter. For the full year, Teladoc guided for a net loss of $0.80 to $1.10 per share.
That’s not encouraging since Teladoc only lost $0.17 per share in 2023’s fourth quarter. Therefore, it’s not good news that Teladoc “reiterated” its less-than-stellar forward guidance.
Is TDOC Stock a Buy, According to Analysts?
On TipRanks, TDOC comes in as a Moderate Buy based on six Buys and 14 Hold ratings assigned by analysts in the past three months. The average Teladoc stock price target is $20.72, implying 43.1% upside potential.
If you’re wondering which analyst you should follow if you want to buy and sell TDOC stock, the most accurate analyst covering the stock (on a one-year timeframe) is Richard Close of Canaccord Genuity (OTC:CCORF), with an average return of 26% per rating and a 56% success rate. Click on the image below to learn more.
Conclusion: Should You Consider Teladoc Stock?
I’m not recommending that anyone should short-sell Teladoc stock. However, I’m bracing for a period of uncertainty and struggle for Teladoc.
If jumping headfirst into the weight-loss treatment trend didn’t boost the Teladoc share price, I’m not sure what would help at this point. Thus, I’m moderately bearish on TDOC stock today and wouldn’t consider taking a long or short position in the shares.
