Teladoc Health (NYSE: TDOC) has been showing signs of life lately. The telehealth company has struggled to win over investors in recent years after incurring billions in impairment charges and repeatedly posting deeply unprofitable quarters. But recently, amid hopes of interest rate cuts, investors have been warming up to the stock again. Teladoc’s shares have risen 18% over the past three months.
Has the tide turned for Teladoc, and is this the start of a much bigger rally for the stock — or is it destined to remain a bad buy?
A big problem for Teladoc was that it overpaid badly for chronic care company Livongo in 2020. It shelled out $18.5 billion for the business in an effort to expand its capabilities. But at the time, valuations were skyrocketing in the markets. Ultimately, Teladoc would go on to incur billions in impairment charges as it wrote down goodwill to adjust for that hefty price tag. In 2022, the company incurred a net loss of $13.7 billion, largely due to goodwill impairment costs of $13.4 billion.