Teladoc (NYSE :), a virtual healthcare service provider, is a favorite among tech investors Cathie Wood. It has been in motion for several months.

From peak to trough, the once hot stock now has 57% less value. Recent selling pressure has only increased the selling pressure.

Many analysts chose to keep their Buy ratings, and their price targets. The long-term story of growth is still strong, and this is a good decision.

Teladoc has an average target price of $203.20. This implies that there is 53.2% potential upside to current levels. Perhaps shares of Teladoc have moved to the upside? Are there going to be many analyst downgrades coming up on the end of this year?

TDOC at around 12.5 times annual sales is far from a classic value play. However, there is a lot to be negative about TDOC, which has been weighed in with industry- and company-specific concerns, as well fears regarding higher rates.

TDOC stock has my support. I believe it can hold its ground better even if virtual visits decrease in post-COVID environments. (See Insiders’ Hot Stocks on TipRanks)

Quartly Mistakes Tough

Teladoc was clearly set high standards going into the second quarter. Although the quarter’s numbers weren’t terrible, they were not good enough for Teladoc to suffer a 20% drop in stock price. However, many were tempted to give up on the company due to the mixed bag of results and the EPS missed.

Teladoc posted a 21% year-overyear growth in organic top-line, along with a per-share loss $0.86 that was higher than expected, which missed the consensus forecast of a $0.56 decrease.

It is no secret that the company reported higher-than expected losses in the past year. Investors seem to expect the worst in the post-COVID environment despite a record number virtual visitors. The losses suffered are certainly not good for the cause.

The best of top line growth might already be behind us, but operating costs are rising. Potential patients may prefer to visit their doctor face-to-face if there is a pandemic.

A doctor cannot get all the information he or she needs via Teladoc. Some illnesses and ailments are more difficult to diagnose or treat through Teladoc.

Wall Street Take

TipRanks analyst consensus rate TDOC stock as a Strong Buy. The 21 analyst ratings include 13 Buy recommendations and 8 Hold recommendations.

The average Teladoc price target is $203.20. Target prices for analyst price ranges from $142 per Share to $291 Per Share.

The Bottom Line

Teladoc appears to be in dire straits, with the expectation of an even worse environment and a continued drop in quarterly earnings. R&D expenses are expected to continue rising, but it is a next-generation technology company, so such should be expected.

There is another concern: Teladoc could be affected by increased competition from telehealth. J.D. has given Teladoc high marks in customer satisfaction. However, there are strong signs that Teladoc’s customer service is superior to the rest. The width of Teladoc’s moat could be underestimated.

Disclosure: Joey Frenette does not own any shares in the companies mentioned at time of publication.

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