Teladoc Health Stock: The Reason for Today’s Spike

Teladoc Health Stock

Teladoc Health Stock (NYSE:TDOC)

In preparation for today’s presentation at the annual J.P. Morgan Healthcare Conference, shares of Teladoc Health (NYSE:TDOC) were trending higher after the telehealth provider upgraded its fourth-quarter outlook, raising the bottom end of its revenue range.

As of 11:33 a.m. Eastern Time, the price of a Teladoc Health stock has increased by 6.8%.

Then What?

Teladoc said in a filing that it anticipates its revenue for the year 2022 to fall somewhere between $2.403 billion and $2.41 billion, which is a change from its previous guidance of $2.395 billion to $2.4 billion. It increased the bottom end of its projection range for the fourth quarter from $625 million to $633 million, bringing the total to $633 million.

It is anticipated that more than one billion dollars of that revenue would come from the company’s BetterHelp mental health product, rapidly becoming its primary growth engine.

In terms of the bottom line, the company did not change its prediction for adjusted EBITDA, which was between $240 million and $250 million.

What’s Next?

Investors were convinced by the employment data released on Friday that the economy may have a “soft landing” and escape experiencing a significant recession. Today’s gains for Teladoc come as other tech companies are also increasing due to this report.

There is potential for a recovery in the price of Teladoc Health stock since it had a significant decline in the previous year. The fact that revenue in the fourth quarter was more than anticipated is a positive indicator, as is the fact that BetterHelp performed very well.

BetterHelp was one of the company’s earlier acquisitions; it spent $4 million in 2015 to acquire it. Most of the health technology company’s growth has been driven by mergers and acquisitions. BetterHelp might be the success story that validates the company’s mergers and acquisitions (M&A) strategy, even though past purchases, most notably Livongo, have been failures. BetterHelp is expected to contribute nearly half of Teladoc’s revenue in 2022. Furthermore, management has said that BetterHelp is contributing to an increase in the company’s margins.

Keep a close watch on the analyst notes that are expected to come out of the conference that is taking place today since they can offer the stock a lift.

Featured Image: Megapixl @ Rafaelhenriquepress

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About the author: I'm a financial journalist with more than 3 years of experience. I have worked for different financial companies and covered stocks listed on ASX, NYSE, NASDAQ, etc. I have a degree in marketing from Bahria University Islamabad Campus (BUIC), Pakistan.