Shares of Teladoc Health Inc. (TDOC) plummeted 5.07% in Monday's pre-market trading session, as concerns over the company's growth and profitability prospects weighed on investor sentiment.

A recent analysis highlighted several red flags for Teladoc's business:

• The company's U.S. integrated care members, a key performance metric, grew by just 7.2% annually over the last two years, which is below average for a consumer internet business. This slower growth in user numbers suggests weak demand for Teladoc's telemedicine services.
• Average revenue per user (ARPU) declined by an average of 1.3% annually over the last two years. This could indicate lower engagement or spending from existing users, which is concerning for a marketplace-based business model.
• Teladoc spends a significant portion (45.7%) of its gross profit on sales and marketing expenses to acquire new users, suggesting an inefficient marketing strategy and intense competition in the telemedicine space.

While Teladoc's current valuation at 4.6x forward EV-to-EBITDA (or $9.38 per share) appears reasonable, the company's shakier fundamentals and potential growth challenges present downside risks for investors. As a result, analysts recommend caution when considering investing in Teladoc and suggest exploring more promising opportunities in the market.