Teladoc shares drop 40% in after-hours trading

Teladoc Health Inc. (TDOC) shares dropped 40% in after-hours trading on Wednesday, following the release of the company’s second-quarter earnings report. The telemedicine company reported a wider-than-expected loss and lowered its full-year revenue guidance.

Teladoc reported a loss of $0.86 per share, compared to the expected loss of $0.56 per share. The company’s revenue for the quarter was $503.1 million, up 109% year-over-year, but fell short of analysts’ expectations of $510.9 million.

The company also lowered its full-year revenue guidance to a range of $2.45 billion to $2.5 billion, down from its previous guidance of $2.7 billion to $2.8 billion. Teladoc cited the impact of the COVID-19 pandemic on its business, as well as the delay in the completion of its acquisition of Livongo Health Inc. (LVGO), which is now expected to close in the fourth quarter.

Teladoc’s shares had been on a tear this year, up more than 150% year-to-date, as the COVID-19 pandemic drove demand for telemedicine services. However, the company’s disappointing earnings report and lowered guidance sent its shares tumbling in after-hours trading.

Teladoc’s CEO, Jason Gorevic, said in a statement, “While we are disappointed with our financial results for the quarter, we remain confident in the long-term growth prospects for our business. We continue to see strong demand for our services and are making significant investments to expand our capabilities and reach.”

Despite the drop in share price, some analysts remain bullish on Teladoc’s long-term prospects. Jefferies analyst David Windley maintained his Buy rating on the stock, saying in a note to clients, “We believe the long-term growth story remains intact, and we view the pullback as a buying opportunity.”

Teladoc’s earnings report and lowered guidance serve as a reminder that even high-flying tech companies are not immune to the economic impact of the COVID-19 pandemic. However, the long-term outlook for telemedicine remains strong, as the pandemic has accelerated the adoption of virtual healthcare services.