Teladoc stock: cautiously optimistic even as insiders dump shares

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Teladoc (NYSE: TDOC) stock price has bounced back recently as investors anticipate a potential pivot of the Federal Reserve. The shares jumped by more than 10% on Tuesday as it reached the highest point since February. In all, they have soared by more than 33% from last year’s lows.

TDOC insiders are selling shares

Teladoc share price has been recovering because of three key reasons. First, some investors believe that the company has become incredibly undervalued. It has a market cap of more than $4.7 billion, which is lower than its all-time high of over $25 billion. As a reminder, Teladoc acquired Livongo Health in a $17 billion deal.

Second, the shares have risen because of the company’s growing market share in the telehealth industry. For example, Betterhelp, a company that had $100 million in 2019 is now generating over $1 billion as demand for mental health rises.

On Tuesday, TDOC stock jumped after the company said that it will launch a new service for weight management and prediabetes programs. These are large industries that could generate millions of dollars in the next few years.

Further, like other technology companies, Teladoc stock has jumped as investors cheer the potential of a Fed pivot. There is a likelihood that the bank will stop hiking rates in the coming months since inflation seems like it has peaked. This also explains why the US dollar has dropped while cryptocurrencies have jumped.

However, the main risk for Teladoc is that its insiders are selling shares. In most cases, insiders exit when they are expecting bad things to happen. It has been widely reported that Silicon Valley Bank executives sold shares before the collapse.

Data compiled by MarketBeat shows that senior executives have been selling shares for years. In March, the company’s CEO sold stock worth over $571k. In all, insiders have sold shares worth over $1.17 million in the past 12 months. No insider has bought shares in this period.

Teladoc stock price forecast

On the daily chart, we see that the TDOC stock price bottomed at $22.56, where it failed to move below several times since 2022. The shares have now moved above the 50-day moving average and formed a small inverted head and shoulders pattern.

Therefore, for now, I am cautiously optimistic about the company’s shares, with the next key level to watch being at $34.24, the highest point on February 1. A move above the key support at $25 will invalidate the bullish view.

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