The stock market’s bullishness unraveled last week and again yesterday. It punished companies that posted weak results. This morning, Teladoc (TDOC) is selling off after posting strong cash flow but quarterly losses.
Teladoc plunged nearly 18% after reporting a 17-cent Q4 GAAP EPS loss. Revenue increased by 3.6% Y/Y to $660.53 million in Q4. However, for Q1, the firm expects to lose 55 cents to 45 cents a share. In FY 2024, revenue of $2.635 billion to $2.735 billion is below the $2.77 billion consensus estimate. Investors will demand a change in Teladoc’s leadership.
Cybersecurity firm Palo Alto Networks (PANW) lost 20% last night. It reported revenue of $1.98 billion (+19.3% Y/Y). With a pre-earnings market capitalization of $115.53 billion, the 14.6 times sales are too expensive for investors. The firm expects to post net income of $5.45 - $5.55 in EPS in 2024. The forward P/E of 65.95x sets the stage for a steep sell-off today.
The news will send CrowdStrike (CRWD) and SentinelOne (S) lower.
In the hyped AI segment, Nvidia (NVDA) and Super Computer Micro (SMCI) risk falling again today. This continues a downtrend that began a few days ago. Markets switch abruptly from extremely bullish to cautious. When panic accelerates, the selling may intensify. Nvidia must post strong quarterly results and even stronger guidance on Wednesday after the market closes.
