By Tomi Kilgore
Accolade, Health Catalyst shares also dive to new lows
Shares of American Well Corp. plumbed record lows Thursday, dragged down by a brutally disappointing outlook from fellow online health care services provider, and market leader Teladoc Inc.
Teladoc's stock plummeted 44.4% in afternoon trading to levels not seen since November 2017, or more than two years before the start of the COVID-19 pandemic, after the company slashed its earnings outlook and recorded a massive impairment charge.
Also read: Teladoc's 'quarter for the bears' sparks and exodus of bulls.
That sent the shares of American Well, which Stifel Nicolaus analyst David Grossman said was the closest competitor to Teladoc, plunging 11.4%.
"While [American Well] is pursuing a different strategy (more platform focused than services focused), visit revenue and behavioral health services are material elements of their mix, they are also vulnerable to these market dynamics," Grossman wrote in a note to clients.
Grossman has rated American Well at hold since December 2020, and currently has a $5 stock price target.
Boston-based American Well went public at the height of the pandemic in September 2020, with its upsized initial public offering pricing at $18 a share, well above the expected range. The stock closed its first day of trading 28.2% above the IPO price, then rallied to a record close of $42.80, or 137.8% above the IPO price, on Jan. 27, 2021.
It's been downhill ever since, with the stock now trading about 83% below its IPO price. The stock has lost 49.7% year to date, while the S&P 500 index has shed 10.2%.
The company is scheduled to report first-quarter results on May 9, after the closing bell. For the fourth quarter, the company beat profit and revenue expectations, but provided 2022 revenue outlook that was below analyst expectations at that time.
American Well's stock wasn't the only one suffering at the hands of Teladoc, as shares of Accolade Inc. (ACCD) dove 11.7% to a record low, and Health Catalyst Inc. (HCAT) dropped 1.5%, also to a record low.
(END) Dow Jones Newswires
April 28, 2022 14:07 ET (18:07 GMT)
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