2 Beaten-Down Stocks to Avoid Right Now
Don't catch a falling knife.
Overview
Buying a stock that has significantly lagged broader equities is only a good idea when there are solid reasons to expect it will bounce back and perform better over the long run. But sometimes that simply isn’t the case, and it’s best to avoid beaten-down companies with dim prospects rather than hoping for a hypothetical turnaround. That brings us to Teladoc Health (NYSE:TDOC) and Recursion Pharmaceuticals (NASDAQ:RXRX). These two healthcare companies have lost significant market value in recent years, but they still aren't worth buying on the dip.
Image source: The Motley Fool.
Teladoc, a telemedicine specialist, has been struggling since its pandemic highs. The company has faced significant competition in recent years, resulting in subpar financial results, particularly in its BetterHelp virtual therapy service, which was once its biggest growth driver. There were signs that Teladoc may have been bouncing back earlier this year as the company was making progress in expanding health insurance coverage for BetterHelp, which it thought would boost demand and revenue.
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Originally published at www.fool.com.