10 Best Stocks to Buy and Hold For 5 Years According to Cathie Wood

4. Teladoc Health, Inc. (NYSE:TDOC)

Ark Investment’s Q4 2020 Investment Stake: $1.5 billion

Number of Q1 2024 Hedge Fund Investors: 31

Share Price Performance Since 2020 End: -95.11%

Teladoc Health, Inc. (NYSE:TDOC) is a virtual health services provider that enables users to seek medical help online. Ark Investment acquired a $3.6 million stake in the firm in Q1 2018. This grew to an all time high of $2.6 billion in Q2 2021, and it sits at $242 million as of Q1 2024 end. Teladoc Health, Inc. (NYSE:TDOC)’s shares are down 95% since the start of 2021. The coronavirus boom made the stock trade at 20x its revenue, and from $1 billion in 2020 end sales doubled to $2 billion at the close of 2021. However, since then revenue growth has slowed down and between 2022 and 2023, Teladoc Health, Inc. (NYSE:TDOC)’s revenue grew by just 8%. The firm expects revenue to sit at $2.6 billion by the end of this year for flat growth. Teladoc Health, Inc. (NYSE:TDOC)’s first quarter results came with a downward guidance revision which reduced 2024 revenue to $2.63 billion from $2.67 billion and operating income to $362 million from $367 million.

Teladoc Health, Inc. (NYSE:TDOC) offers its services to consumers through its mental health platform BetterHelp and its broader Integrated Care platform. BetterHelp accounted for $1.1 billion of Teladoc Health, Inc. (NYSE:TDOC)’s $2.4 billion in revenue during the full year 2023, but the platform is struggling to attract customers. During the Q4 2023 earnings call management shared:

Turning to the BetterHelp segment, Revenue was $276 million in the fourth quarter, while adjusted EBITDA was $58 million. BetterHelp margins expanded 210 basis points over the prior year’s fourth quarter, which helped drive year-over-year adjusted EBITDA growth of 11% despite lower revenue.

While we’re pleased to deliver double-digit adjusted EBITDA growth at BetterHelp both for the quarter and the full year, revenue and margins were below our expectations in the quarter as we saw lower yields on marketing spend. Specifically, we experienced returns on our social media advertising spend that were below target in the second half of the year, which was a departure relative to the first half. We’ll speak to guidance in a moment, but our BetterHelp outlook assumes the lower yields experienced in certain channels in the second half of 2023 will persist and as a result will impact our year-over-year growth rates in the first half of 2024.