A class action lawsuit has been filed against leading telehealth provider Teladoc Health, alleging it has misled investors by mainly not disclosing the industry's intense competition and providing unsustainable revenue and EBITDA targets for FY 2022.

The suit was filed on behalf of investors who purchased the company's shares between October 2021 and April 2022 and alleges that the firm and its C-suite executives, mainly the CEO Jason Gorevic and CFO Mala Murthy, are responsible for this violation of the Securities Exchange Act of 1934.

This lawsuit comes after Teladoc posted a loss per share of USD 41.58 for Q1 2022 compared to a loss of USD 1.31 in Q1 2021, missing analyst consensus of USD 0.56. The company also revised its estimate for FY2022, projecting revenue growth of 18.1%–23.0% YoY (compared to previous estimates of 25.5%–30.4% growth), mainly due to increased competition in its mental health and chronic care operations. Teladoc’s share fell more than 40% after the earnings release to close at USD 33.51 on April 28, 2022.

The lawsuit states that the plaintiff had experienced significant losses and damages due to the wrongful acts and omissions by the named parties. However, a spokesperson for Teladoc Health stated that there was no factual basis for the suit.