Teladoc has fallen 90% from its 2021 highs. Is it a buy now that Amazon is exiting the market?
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Teladoc Health (NYSE:TDOC) received a brief surge of buying interest recently as Amazon (AMZN) announced that it was shutting down a competing telehealth service. However, the gains proved short-lived, as Wall Street remains littered with skeptics, who see significant headwinds for the company.
This worry comes even as the stock sits 90% off its pandemic highs, weighed down by receding COVID demand and a murky economic environment. Does TDOC represent a buy at these levels, given the competitive landscape and its beaten-down stock price?
Competition & Downgrades
Teladoc (TDOC) shares ticked higher last week after e-commerce titan Amazon (AMZN) revealed that it intends to shut down its Amazon Care telehealth business by the end of the year. The removal of Amazon Care could boost TDOC's prospects by getting rid of a large competitor.
TDOC rallied nearly 7% last Wednesday amid the news.
However, the AMZN news hasn't prompted a sustained rally. Shares retreated late last week amid general market concerns about inflation and interest rates. A risk-off attitude on Wall Street weighed on TDOC, sending the stock lower by nearly 9% on Friday.
At the same time, many on Wall Street still see risks ahead for the telehealth firm, even after the massive retreat shares have seen since their pandemic highs. The stock has fallen about 90% since its peak of around $308 a share in early 2021. In 2022 alone, the stock has lost about two-thirds of its value.
Exemplifying the ongoing cautious attitude towards TDOC, Guggenheim downgraded the stock to a Sell from a Neutral rating. The downgrade now represents the first sell-equivalent rating on Wall Street.
Meanwhile, Cowen also downgraded Teladoc to Market Perform from Outperform, citing macro headwinds on its behavioral health franchise and the trajectory of its chronic care business. Furthermore, Cowen also cut its price target to $34 from $58.
Is TDOC a Buy?
Wall Street has generally taken a neutral stand on TDOC. Of the 29 analysts polled by Seeking Alpha, 22 classified have labeled the stock as a Hold. On the bullish side, four analysts have given shares a Strong Buy rating, while two others have issued Buy recommendations.
While the bulls are a relative minority, they do include some high-profile backers. This list includes fund manager Cathie Wood, who has put TDOC in four of her popular innovation-focused ETFs.
Among the 116 ETFs that hold TDOC, Wood's ARK Genomic Revolution ETF (ARKG), ARK Innovation ETF (ARKK), ARK Next Generation Internet ETF (ARKW) and ARK Fintech Innovation ETF (ARKF) have the most significant portfolio weightings. These sit at 4.70%, 4.52%, 4.28% and 3.23%, respectively.
Meanwhile, Wall Street has issued an average price target of $37.65, compared to the current price of about $31. Reaching the average price target would represent a 21% rally.
Seeking Alphaâs Quant Ratings also present a mixed outlook for TDOC. As a whole, the system for grading quantitative measures views the stock as a Hold. Shares receive a B+ for valuation, but this is offset by D grades for growth and momentum.
See a detailed breakdown below:

For more on the bullish case, Seeking Alpha contributor SL Investments is optimistic on TDOC with AMZN now out of the way. SL Investments stated: âDespite the recent goodwill impairment charge drama, I believe Teladoc is a long-term buy.â JR Research, another SA contributor, views TDOC as a Hold after a previous disappointing Q2 earnings report.