What Happened?
Shares of digital medical services platform Teladoc Health (NYSE: TDOC) jumped 10.9% in the afternoon session after Citron Research published a report highlighting the company's growth potential following Teladoc's impressive updates at a Goldman Sachs Healthcare conference.
TDOC's management noted that roughly 80% of the 4 million US people who sign up for BetterHelp drop off or fail to convert because the system is cash only and also expensive. So, embedding BetterHelp into employer health benefits could help significantly improve conversion.
Citron Research pointed to Teladoc's recent acquisition of UpLift Health Technologies as a "transformational" development, suggesting it will significantly boost revenue by enabling insurance billing for BetterHelp services, which were previously cash-pay only. The argument is that a 1% lift in conversion (@ an annual fee of 1,250) could add $40 million to TDOC's annual sales.
Lastly, Citron highlighted the potential for AI to drive profits, noting that Teladoc's scale will be tough to replicate.
The shares closed the day at $7.90, up 14.5% from previous close.
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What The Market Is Telling Us
Teladoc’s shares are extremely volatile and have had 40 moves greater than 5% over the last year. But moves this big are rare even for Teladoc and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 17 days ago when the stock gained 5.7% on the news that the major indices rebounded, as the Bureau of Labor Statistics report revealed a resilient labor market with non-farm payrolls rising by 139,000 in May 2025, significantly above the consensus forecast of 125,000.
Notably, a stable labor market often supports consumer spending, which is a key driver of economic growth, which means the report could help ease some of the recession fears that gripped markets.
Also, it is possible some investors were buying the dip following the sell-off at the end of the previous week.
Teladoc is down 15.7% since the beginning of the year, and at $8.03 per share, it is trading 44% below its 52-week high of $14.33 from February 2025. Investors who bought $1,000 worth of Teladoc’s shares 5 years ago would now be looking at an investment worth $40.54.
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