Shares of Teladoc Health, Inc. (NYSE:TDOC) plunged more than 40% after it reported a net loss of $6.67 billion in the first quarter of 2022. The loss came at the back of a $6.6 billion non-cash goodwill impairment charge.

The charge was related to the company’s acquisition of Livongo Health. This implies that the company could have reported a loss of just $70 million without the impairment charge, narrower compared to a loss of $199.65 million in the previous year.

Nonetheless, Teladoc’s revenue of $565.4 million in the quarter was 25% higher than the prior year. The company issued a revenue guidance of $580 million and $600 million in the second quarter.

The net loss per share is expected to narrow to minus $0.60 and minus $0.72, compared to minus $41.58 per share in the first quarter. 

On Wall Street, Teladoc has a Moderate Buy rating. It comes from 10 Buy ratings and 18 Holds, with an average $64.48 price target. The current price of $33.51 represents around 100% upside potential.

Investors are betting on the use cases of telemedicine in the rating. However, the pandemic boom is waning, with TDOC losing 64% year-to-date and 77% in the last six months. The quarter earnings also prompted a downgrade on the stock, with Deutsche Bank recommending a hold.

TDOC technical analysis

Technically, TDOC is oversold, with an RSI reading of 25. The stock broke below support of $50 after the disappointing quarterly results. At the current level, TDOC is trading at a pre-pandemic level, meaning the stock has a price in the post-Covid era.

With no immediate level in sight, the stock could go lower. TDOC lovers should only look to buy the dip once the current weakness ends and the stock settles.

Summary

TDOC is currently an oversold stock. However, the current weakness after the quarter results could continue for some time. However, investors should not buy the dip until the stock finds suitable support.

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