Shares of Teladoc Health Are Skyrocketing - Can This Trend Continue?

One of the standouts of Friday's trading session was Teladoc Health, which logged a 3.43% performance and outperformed the S&P 500 by 2.77%. The Medical and Nursing Services stock is now trading at $25.06 per share and may still have upside potential because it is still -15.76% under its average target price of $29.75. Analysts have set target prices ranging from $23.0 to $40.0 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 18.01%. Each short position represents an investor's expectation and hope that the stock's price will reverse course and start declining.

When a stock is sold short, it means an investor has borrowed shares of the stock from their broker, and then sold them at the going market price. The investor hopes for the price to decline, so that they might buy those shares back at a lower price in the future. Once they do, they can return the borrowed shares to their broker, and keep the profit they made on the transaction.

One way to get an idea of the market sentiment on a stock is to check its rate of institutional ownership. In the case of Teladoc Health, institutional investors own 82.13% of the shares. This would indicate a positive sentiment towards the stock among institutions. What does this really tell us?

Institutional investors such as hedge funds, investment firms, and wealth managers devote significant resources to identifying good investments. If they have decided to invest in TDOC, it probably means they believe it is a solid investment choice. But it could also mean they are buying up shares in an effort to acquire the company or get seats on the board of directors. Also bear in mind that institutions are fallible (just maybe not quite as fallible as the average retail investor), so they may simply be wrong when they think they've found a good stock.

In conclusion, we see negative market sentiment regarding Teladoc Health because of an analyst consensus of some upside potential, no average rating visible in our data, no information on the number of shares sold short, and no information on the 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 $-86.29

  • Teladoc Health has a trailing 12 month Price to Earnings (P/E) ratio of -0.29 compared to the S&P 500 average of 15.97

  • The company has a Price to Book (P/B) ratio of 0.759 in contrast to the S&P 500's average ratio of 2.95

  • Teladoc Health is a Health Care company, and the sector average P/E and P/B ratios are 24.45 and 4.16 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.