Why Are TDOC Shares Falling Today?

Teladoc Health dropped -1.4% drop today, underperforming the S&P 500 by -1.2%. The Health Information Services stock is now trading at $28.39 per share and is -13.76% below its average target price of $32.92. Analysts have set target prices ranging from $24 to $45 dollars per share, and have given the stock an average rating of hold.

The market sentiment on Teladoc Health seems pessimistic because the proportion of shorted shares in its float is quite high at 22.1%. Each short position represents an investor's expectation and hope that the stock's price will reverse course and start declining.

Short selling involves borrowing shares and then selling them at current market prices. In the successful version of the strategy, the shares are purchased at a lower price at some time in the future. The investor then returns the shares to the lender, and keeps the profit made on the sell/buy transaction.

Another way to gauge the sentiment on Teladoc Health is to look at the percentage of institutions that are invested in the stock. In this case, 83.9% of the shares are held by pension, mutual, and hedge funds, which shows that these institutions probably have strong confidence in the stock.

Institutions have vast resources. If institutions are invested in a particular stock, it shows in most cases that they have performed quality research and concluded that it is a good investment. In some cases, however, increases in institutional ownership could be a sign of a takeover attempt or proxy fight, which can actually injure share prices. Also, institutions are not infallible, and can certainly make miscalculations — often with spectacular results.

To sum up, Teladoc Health is probably the subject of mixed market sentiment because of its an analyst consensus of some upside potential, a hold rating,, an unusually large proportion if its shares sold short and, and a significant number of institutional investors. At Market Inference, we believe that any investment decision should be preceded by an in-depth analysis of the company's fundamental values and a comparison with similar stocks.

Here's a snapshot of some important facts to keep in mind about TDOC:

  • The stock has trailing 12 month earnings per share (Eps) of $-43.41

  • Teladoc Health has a trailing 12 month Price to Earnings (P/E) ratio of -0.7 compared to the S&P 500 average of 15.97

  • The company has a Price to Book (P/B) ratio of 0.8 in contrast to the S&P 500's average ratio of 2.95

  • Teladoc Health is a Healthcare company, and the sector average P/E and P/B ratios are 13.21 and 4.07 respectively

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.