Teladoc Health, Inc. (TDOC) is a virtual health provider with a telehealth platform delivering 24-hour, on-demand healthcare via mobile devices, the Internet, video, and phone. It also offers remote patient monitoring programs for chronic care management. Its platform connects members with a network of physicians and behavioral health professionals.
Demand for TDOC’s offerings have been decreasing this year after a surge in demand last year. Even as the Delta variant soared across the country, doctor’s started seeing patients in the office again. The company’s 2021 guidance for membership and visit growth is now lower than last year’s.
As of the most recent quarter the company had $786 million in cash, which compared favorably to no short-term debt. In terms of growth, TDOC’s earnings are expected to fall 48.8% year over year in the current quarter.
Plus, the stock looks overvalued with a high price-to-sales ratio of 10.8. The stock has been showing bearish momentum since July as shown in the chart below.
Take a look at the 1-year chart of TDOC below with my added notations:
Chart of TDOC provided by TradingView
TDOC has formed a major support level at $130 (green) over the past several months. In addition, the stock is also declining against a down trending resistance line (red). These two lines have TDOC trading within a common pattern known as a descending triangle.
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Eventually, the stock will break out of this pattern. A short trade could be made on a break of the $130 support level. A long trade could be made on a break through the trendline resistance.
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TDOC shares fell $2.23 (-1.66%) in premarket trading Tuesday. Year-to-date, TDOC has declined -33.80%, versus a 18.47% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp
I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group and Yolo Publishing. More...
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