After the popular meme stocks AMC and GameStop tumbled in price this month, the meme stock mania appears to be ebbing. The buzz has worn off for the meme stocks for now but is expected to resume at the beginning of 2022. While the development of therapies…
increasing demand from an aging population, and a growing trend in preventive healthcare should propel the healthcare sector’s growth in the post-pandemic environment, the sector is expected to face new challenges next year. The healthcare labor shortage, cyberattacks, and the need for stronger management to tackle risks are among the challenges the healthcare sector is expected to face in 2022.
Given this backdrop, we think it is better to avoid meme stocks in the healthcare sector Teladoc Health, Inc. (TDOC – Get Rating), Clover Health Investments, Corp. (CLOV – Get Rating), and Sundial Growers Inc. (SNDL – Get Rating). None is not well-positioned to capitalize on the industry tailwinds.
Incorporated in 2002, TDOC in Dallas, Tex., is a virtual healthcare service provider that operates in the United States and internationally. The company offers telehealth solutions, chronic condition management, expert medical services, and behavioral health solutions. TDOC’s consumer brands include: Teladoc, Livongo, Advance Medical, Best Doctors, BetterHelp, and HealthiestYou that provide access to advice and resolution for an array of healthcare needs.
TDOC’s revenue increased 80.6% year-over-year to $521.66 million in the third quarter, ended September 30, 2021. However, the company’s total expenses grew 88.7% from their year-ago value to $582.23 million. Its loss from operations rose 207.1% from the prior-year quarter to $60.58 million. Also, the company’s net loss increased 135% year-over-year to $84.34 million.
TDOC has failed to beat the consensus EPS estimates in three of the trailing four quarters. Its EPS is expected to decrease 35.5% per annum over the next five years. The stock has declined 50.3% in price over the past year and 51.1% year-to-date.
TDOC’s POWR Ratings are consistent with this bleak outlook. The stock has an overall F rating, which equates to a Strong Sell in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
Also, the stock has an F grade for Sentiment and a D grade for Value and Stability. We have also graded TDOC for Growth, Momentum, and Quality. Click here to access all TDOC’s ratings. TDOC is ranked #86 of the 88 stocks in the D-rated Medical – Services industry.
CLOV provides Medicare Advantage and healthcare plans to America’s seniors. The Franklin, Tenn.-based company offers a software platform that uses data and technology, the Clover Assistant, which aggregates patient data from across the health ecosystem and provides primary care physicians (PCPs). In addition…
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