Teladoc shares hit record low after telehealth firm withdraws 2024 forecast (updated)

Teladoc Health

01/08/2024 16:03

(Adds share milestone in paragraph 1, background in paragraph 3
and graphics)
    By Bhanvi Satija
       Aug 1 (Reuters) - Teladoc Health's  TDOC.N  shares hit a
record low on Thursday, as surging costs and declining revenue
in its mental health services unit forced the virtual healthcare
provider to withdraw its annual and long-term forecasts.
    The company recorded a $790 million impairment charge
related to BetterHelp in the second quarter and flagged a
double-digit increase in customer acquisition expenses from last
quarter.
    Teladoc enjoyed several years of growth, further accelerated
by a surge in demand for virtual medical services during the
pandemic as the lockdowns forced people to stay indoors.
    The company is now undergoing what some analysts called a
"strategic reset" under the leadership of its recently hired CEO
Chuck Divita.
    "Teladoc has become a victim of its own success and finds
itself at a crossroads as it explores the next phase of growth,"
Oppenheimer analyst Michael Wiederhorn said.
    Higher advertising costs for BetterHelp have also hampered
the telehealth provider's growth in the United States.
    Integrated Care, Teladoc's chronic care unit, should be the
focus of its strategic shift, Leerink Partners analyst Michael
Cherny wrote in a note titled 'BetterHelp Needs Some Help'.
    BetterHelp services are offered directly to consumers on its
platform and through some partnerships with employer groups.
    Teladoc said on Wednesday it was assessing if it can offer
services for the platform through more contracts with health
insurers and employer groups.
    While expanding BetterHelp's products and international
presence are viable options, a potential sale of the segment can
also be a path forward, said Barclays analyst Stephanie Davis.
    Shares of Teladoc tumbled 13% to $8.22 in morning trading.  
 
    At least five brokerages cut their price targets on Teladoc
stock. It has declined about 60% so far in 2024 and is on track
to post a fall for the fourth straight year.    

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Teladoc's annual sales grew during the pandemic    https://reut.rs/3A14D7C
Teladoc share performance since 2019    https://reut.rs/3Yod5bl
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Bhanvi Satija in Bengaluru; Editing by Shilpi
Majumdar)
 ((Bhanvi.Satija@thomsonreuters.com; Outside U.S. +91
9873062788;))