Teladoc Health’s long-time chief executive officer Jason Gorevic is leaving the virtual care giant effective immediately, the company said Friday.
Gorevic has been CEO since 2009 and oversaw a period of exponential growth for Teladoc during the COVID-19 telehealth boom. However, he’s departing after the telehealth company struggled to sustain that momentum as the pandemic waned. Teladoc’s stock has sunk significantly since early 2021, and recently hit an eight-year low.
The leadership change is probably coming at the right time, as the company focuses on a longer-term profit growth strategy, Leerink Partners analysts Michael Cherny, Daniel Clark and Ahmed Muhammad wrote in a Friday note.
“Given the underperformance a management change is likely warranted, especially with a reboot that may simply need a new set of leadership hands to execute on,” they said.
Teladoc’s board of directors has appointed current chief financial officer Mala Murthy as interim chief executive while it searches for Gorevic’s permanent successor.
Murthy will also hold the CFO role while Teladoc evaluates both internal and external CEO candidates, the company said. Before joining the virtual care firm in 2019, Murthy held leadership positions at American Express and PepsiCo.
“We are confident that this leadership transition will position the company for long-term success and value creation,” David Snow, Jr., chairman of the Teladoc’s board, said in a statement.
In 2022, Teladoc posted a historic net loss of $13.7 billion, as impairment charges linked to the declining value of its acquisition of chronic condition management company Livongo hammered its bottom line.
Teladoc improved its finances last year, but still reported a net loss of $220.4 million. During an earnings call in October, the virtual care company said it would pursue an operational review to improve performance, with Gorevic noting the company was “disappointed” with its stock valuation.
In light of Teladoc’s stock underperformance, “we are not surprised to see the Board decide to make a change,” wrote TD Cowen analyst Charles Rhyee in a note Friday. “We believe some may question why the Board did not make such a strategic decision sooner.”
Teladoc’s stock rose slightly in Friday morning trade following the announcement.
Teladoc also reaffirmed its guidance for the first quarter and full year on Friday. The company expects revenue between $630 and $645 million during the first quarter, with a net loss between $0.55 and $0.45 per share.
For the full year 2024, Teladoc is guiding to a net loss between $1.10 and $0.80 per share, on revenue between $2.64 billion and $2.74 billion.
