Teladoc shareholders have sued the company class action Alleging that the company makes false or misleading statements about financial performance.
Shareholders accuse Teladoc of failing to disclose “how factors such as increased competition have negatively impacted Teladoc’s BetterHelp and chronic care businesses” and “how growth in these businesses has not been as sustainable as the defendants would have investors believe.” Resulting in unrealistic fiscal forecasts for the current fiscal year.
In February, Teladoc forecast 2022 revenue of $255 million to $2.65 billion and adjusted earnings of $330 to $355 million, the lawsuit said. Earnings announced in April Press Releases Showed first-quarter revenue of $565.4 million, up from $453,767 last year. But revenue fell short of the consensus estimate of $3.23 million. Also in April, the company lowered its 2022 revenue forecast to $240 million to $2.5 billion.
“There is no factual basis for this lawsuit, but unfortunately, such frivolous lawsuits are now the norm for public companies,” a Teladoc spokesperson said in an emailed statement.
The company reported a net loss of $41.58 per share in the first quarter of this year, compared with a net loss of $1.31 per share in the year-ago period, and a total net loss of $6,674.5 million, attributable to a non-cash goodwill impairment charge of $6.6 million.
In a press release announcing its April first-quarter earnings, Teladoc CEO Jason Gorevic attributed the loss to increased advertising costs.
“In the D2C mental health market, higher advertising costs in certain channels have resulted in lower-than-expected gains in our marketing spend. In the chronic disease market, as employers and health plans evaluate their long-term strategies to deliver the benefits and Nursing, we are seeing an extended sales cycle. Despite our revised outlook for 2022, we are confident in our strategy and the breadth and depth of our capabilities that will enable people around the world to lead healthier lives, “Gorevic said.
Telehealth has been on a downward trend following the early boom in the COVID-19 pandemic. Teladoc’s biggest competitor, Amwell, also reported loss of income in the first quarter of this year. Amwell reports the company’s Net loss was $70.3 million compared to $39.8 million in the first quarter of 2021. The company’s total revenue in the first quarter of this year was $64.2 million, compared with $57.6 million last year.
One McKinsey report Released in February Summarized the downtrend and found that IIn April 2020, the number of virtual visits via telehealth was 78 times what it was two months earlier, but a year later, in mid-2021, the number of telehealth visits has dropped to 38 times pre-COVID-19 levels.
A lawyer for the shareholders declined to comment.
the case is 1:22-cv-04687 in the Southern District of New York.
Photo: elenabs, Getty Images
