Why Teladoc (TDOC) Shares Are Plunging Today

What Happened?

Shares of digital medical services platform Teladoc Health (NYSE:TDOC) fell 5.6% in the afternoon session after BofA Securities lowered its price target on the stock as concerns grew over expiring Medicare telehealth reimbursements. 

The bank reduced its price target to $7.00 from $7.50, keeping a Neutral rating. The firm pointed to a nearly 19% year-over-year drop in monthly active users for Teladoc's BetterHelp service in the fourth quarter. Analysts also noted ongoing pressure on the service due to weak consumer sentiment. 

Adding to the negative mood, telehealth reimbursement provisions for Medicare patients were set to expire at the end of January. This change was expected to limit payments for at-home services, which would likely reduce demand for the company's offerings. Teladoc had already been experiencing slow revenue growth and struggles with its BetterHelp service before this news.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Teladoc? Access our full analysis report here, it’s free.

What Is The Market Telling Us

Teladoc’s shares are extremely volatile and have had 45 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 7 days ago when the stock dropped 1.2% on the news that the U.S. announced potential tariffs on several European countries. 

The sell-off was a reaction to news that the White House planned to impose a 10% tariff on imports from eight European nations, including France, Germany, and the United Kingdom, starting February 1. Reports indicated the tariffs were intended to pressure Denmark over the potential sale of Greenland to the U.S. and could rise to 25% if a deal was not reached. 

The announcement caused a significant downturn in U.S. stocks, with the S&P 500 and Dow Jones falling more than 1.4% as investors returned from a holiday weekend and reacted to the heightened trade uncertainty. The downturn was further exacerbated by a spike in Treasury yields. Higher rates particularly hurt growth stocks such as tech names since investors must discount financials further out in the future back to the present.

Teladoc is down 16.1% since the beginning of the year, and at $5.92 per share, it is trading 58.7% 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 $21.59.

While Wall Street chases Nvidia at all-time highs, an under-the-radar semiconductor supplier is dominating a critical AI component these giants can’t build without. Click here to access our full research report, it’s free.