Teladoc Health stock price surged by over 14% on Monday, its best single-day gain since April 9. TDOC jumped to a high of $7.90, its highest point since April 9. This article conducts a technical analysis to explain why the TDOC stock may jump by 95% this year.
Teladoc Health stock price analysis
The daily chart shows that the TDOC share price bottomed at $6.7 in 2024 and this year. It has failed to move below that support level at least two times since August 14.
This means that the stock formed a double-bottom pattern, a popular bullish reversal sign. This pattern comprises two distinct bottoms and a neckline, which in this case, is at $15.20, up by about 95% from the current level.
Teladoc Health stock price has also gone through a period of consolidation, where it remained inside the channel between $6.77 and $7.66. This consolidation led to a sharp decline of the Average True Range (ATR) and narrowing of the spread between the three lines of Bollinger Bands.
The consolidation could be part of the accumulation phase of the Wyckoff Method. This phase is characterized by low volume and volatility, and is then followed by the markup phase, which has higher demand than supply.
Therefore, the stock will likely have a strong bullish breakout in the coming weeks as investors buy the dip. If this happens, it will likely surge to the double-bottom’s neckline at $15.20.
The bullish Teladoc stock forecast will become invalidated if it drops below the double-bottom point at $6.38. Such a move will point to more downside, potentially to the psychological point at $5.
TDOC is facing challenges, but a turnaround could help
It is unclear why the Teladoc Health stock price surged on Monday. However, it is worth noting that this happened on the same day that Hims & Hers stock price plunged by over 34% after losing the valuable Novo Nordisk partnership.
Teladoc Health has been going through substantial challenges in the past few years as the pandemic boom turned into doom. Its annual revenue moved from $1.09 billion in 2020 to over $2.03 billion in 2021 and $2.4 billion in 2022.
Recently, however, the growth has deteriorated, with its annual revenue in 2024 coming in at $2.56 billion, and analysts anticipate its figure will come in at over $2.52 billion this year.
All of Telaoc Health’s segments have slowed, with the most pain being in its BetterHelp business.
The most recent results showed that the company’s first-quarter revenue dropped by 3% to over $629 million and its net loss per share stood at 53 cents.
Teladoc Health’s Integrated Care Segment, which serves millions of customers, made $389 million, up from $377 million in the same period last year.
However, its BetterHelp revenue has continued to fall quarter after quarter. Its revenue was $240 million, down from $269 million in the same period last year. It is unclear whether this business will recover as its number of paying users has dropped below 400,000 for the first time in years.
A potential turnaround strategy would be to divest the BetterHelp segment, potentially to a private equity company. The remaining company would be a specialist in the integrated care business, whose US clients jumped from 91.8 million last year to 102.5 million.
Teladoc Health and analysts believe that the slowdown will continue this year. Management expects the revenue to drop by 4% to $2.46 billion and the loss per share to be between $1.40 and 90 cents.
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