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On 27th April, Teladoc issued disappointing Q1 2022 results leading to a 40% one-day drop in valuation. Although customer and revenue growth was broadly in-line with forecasts, company leadership highlighted the growing competition from well capitalised health-tech startups, resulting in increased costs for paid search and a lower than expected return on marketing spend. These are clear signs that Telemedicine is becoming a commoditised sector, and thus far Teladoc has not demonstrated that it has a differentiated service. This presents the concern that the company may not have pricing power, potentially constraining revenue growth in the future.
