Why did Teladoc Health's stock plummet, but then come back up today?

Virtual Healthcare ProviderTeladoc Health (New York Stock Exchange)Stock Code(TDOC)The company's stock plunged nearly 5% on Friday morning, then climbed on the green side. The company announced this morning that Chief Executive Officer Jason Gorevic is leaving the company "with immediate effect" and that current Chief Financial Officer Mala Murthy will become acting Chief Executive Officer.

As of 11:10 a.m. ET, Teladoc shares were up about 0.2%.

Teladoc's Chief Executive Officer has left the company.

Teladoc did not clearly explain the reasons for the departure of Gorevich, who had led Teladoc since June 2009, from the company. The "immediate effect" of his departure and the lack of an obvious succession plan (the company's board of directors has only now hired an executive search firm to find a successor) have undoubtedly added to investors' concerns.

While the Board has attempted to assuage investor concerns by thanking Gorevic for her "many accomplishments" and calling interim Matron Murthy a "seasoned industry leader," there is no indication that the Board believes she is sufficiently qualified to take on the role of long-term Matron. to take on the role of mat executive on a permanent basis.

Should I sell Teladoc shares?

In short, Teladoc, a stock that has never made a profit, reported an incredible $13.7 billion net loss two years ago (that's a lot of money for a company with a $2.4 billion market capitalization!) Now the company has actually gone bankrupt. - Now, the company is effectively rudderless. So, is it time for Bria to take a lesson from the Executive Officer and abandon the ship?

Not necessarily.

In fact, while Teladoc is technically "unprofitable," the company did generate $339 million in positive free cash flow last year, nearly double the cash profit it will generate in 2022, the very year that saw a massive $13.7 billion "loss The year 2022 is the year of the massive $13.7 billion "loss".

Debt levels are moderate - net of cash on hand of about $472 million - and while this year's free cash flow level may not come close to last year's figure, it is expected to be $212 million, and the company's P/E ratio is only 11.2, which is very reasonable in my opinion.

To make a long story short: this is a solid ship, and all Teladoc Stock needs to succeed is a great new captain.

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Rich Smith does not own any of the shares listed above.The Motley Fool holds a recommendation for Teladoc Health.The Motley Fool has a disclosure policy.

Why did Teladoc Health's share price take a nosedive today, only to rise again?