Teladoc has been hit with a class action lawsuit for allegedly making “false and misleading statements” about its business.
Teladoc is a New York-based telemedicine and telehealth provider that saw demand soar during the early days of the COVID-19 pandemic as in-person healthcare services were temporarily halted. The lawsuit was filed by Bragar Eagel & Squire, P.C., a stockholder rights law firm, on behalf of those who purchased or acquired Teladoc stock between October 28, 2021, and April 27, 2022.
Teladoc offers both business-to-business and direct-to-consumer services. The company launched its global telehealth services in 2018. Several major companies, including Amazon, Walmart and others, have ramped up their telehealth services over the past several years. The lawsuit comes as telehealth demand––which initially skyrocketed when elective procedures were paused during the pandemic––has since begun to wane. Despite the rising competition and shift in demand, Teladoc “has continued to assure investors of the company’s dominant market position in the industry,” the law firm noted.
As of February 2022, Teladoc was projecting high revenues. Teladoc forecasted full year 2022 revenue of $2.55 billion - $2.65 billion, as well as adjusted EBITDA of $330 - $355 million, on anticipated continued growth through its competitive advantages. The company reported revenue of $565.4 million, missing consensus estimates by $3.23 million, and “[n]et loss per share of $41.58, primarily driven by [a] non-cash goodwill impairment charge of $6.6 billion or $41.11 per share,” the law firm wrote. Given those results, Teladoc adjusted its full year guidance to $2.4 billion - $2.5 billion and adjusted EBITDA guidance to $240 - $265 million “to reflect dynamics we are currently experiencing in the [D2C] mental health and chronic condition markets.”
On a quarterly earnings call, Teladoc’s leadership blamed poor results on rising competition.
“On this news, Teladoc’s stock price fell $22.48 per share, or 40.15%, to close at $33.51 per share on April 28, 2022,” the law firm stated.
The law firm urged stockholders who acquired shares and suffered a loss to get in touch and join the lawsuit.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."