"The stock has been under pressure for the past few months since the firm signaled that it expects little membership growth in 2021. A lack of growth is bad for any company, but is particularly tough for those like Teladoc that are losing money, whose share prices are pegged to their growth potential.
Last Wednesday, the company reported a first-quarter net loss of $1.31 a share, much worse than the 54 cents Wall Street expected. That news triggered more declines in the stock; it is now down 46% from its February peak.
But the latest selloff isn’t just the aftermath of the poor earnings. This week, concern mounted over whether Teladoc can retain its customers in an increasingly competitive space.
In a Wall Street Journal article published on Monday, PepsiCo ‘s former head of benefits Erik Sossa said that the firm stopped using Teladoc and switched to rival LiveHealth Online, partially because the digital-health service isn’t connected to PepsiCo’s existing health plan, making it impossible for doctors to see patients’ health histories. 'Telemedicine is a fantastic medium, but if it’s just late-night urgent care, it’s kind of a commodity,' Sossa told the Journal.
Investors are concerned that contract losses could become a more frequent problem. A recent Credit Suisse survey shows that 81% of the responding companies are offering telehealth benefits to their employees via health insurers instead of direct contracts. A decision to do the same is likely behind PepsiCo’s shift away from Teladoc, according to Halper. One of the firm’s health insurers, Anthem (ANTM), was the previous owner of LiveHealth Online."
Submitted May 05, 2021 at 08:36PM by EMECOR https://ift.tt/3ePAQjW
