Why These Two Stocks May Not Settle Down in 2026

The investment community has largely turned its back on Sarepta Therapeutics (NASDAQ: SRPT) and Teladoc Health (NYSE: TDOC), with both companies experiencing steep declines that have devastated shareholder value. While distressed valuations might ordinarily signal a potential recovery opportunity, the underlying fundamentals tell a different story. Both firms face structural headwinds that suggest any meaningful rebound remains unlikely in the near term, making them treacherous choices for most investors.

Sarepta Therapeutics: When Innovation Collides with Safety

Sarepta’s share price plummeted more than 80% last year following serious safety complications surrounding its marquee product. The biotech firm specializes in developing treatments for rare genetic diseases, with particular focus on Duchenne muscular dystrophy (DMD), a progressive neuromuscular condition that gradually robs patients of muscle strength and mobility.

Elevidys, Sarepta’s gene therapy candidate, represented a breakthrough approach—the only Sarepta therapy targeting the root cause of DMD. However, the clinical reality proved sobering. During 2025, two patients enrolled in Elevidys treatment died from acute liver failure, a development that forced regulators to mandate a boxed warning about potential hepatotoxicity and serious adverse events. Access to the medication became heavily restricted, particularly among non-ambulatory DMD patients representing the highest-risk population.

The commercial consequences were immediate and severe. Demand for Elevidys evaporated far faster than management anticipated. For the full year 2025, the company projects revenues of $1.86 billion—essentially flat compared to the prior year’s $1.9 billion. Without the safety cloud hanging over Elevidys, revenue should have expanded considerably given the company’s historical growth trajectory.

Sarepta is pursuing multiple strategies to stabilize its position. The company maintains several earlier-stage pipeline candidates and expects preliminary data on some initiatives during 2026. Yet these experimental therapies operate on a much longer development timeline and cannot meaningfully bolster near-term financial performance. Adding to investor anxiety, one of Sarepta’s development-stage programs was also implicated in patient deaths from liver failure, leading the company to halt that program. This pattern raises legitimate concerns about the company’s drug development practices and risk management protocols.

The path forward for Elevidys remains clouded with uncertainty. Until the company can demonstrate meaningful improvements in safety data, patient access, and revenue trajectory, the stock may well test lower levels before stabilizing.

Teladoc Health: Battling Structural Headwinds

Teladoc Health operates in the telemedicine space, yet finds itself struggling to navigate an increasingly crowded competitive landscape. Revenue growth has essentially stalled, while cumulative losses continue mounting. What derailed this once-promising growth story?

During the pandemic’s early phase, Teladoc benefited from tailwinds as telehealth adoption surged. However, competitive intensity has intensified sharply since those boom years. Recognizing the opportunity, established healthcare systems and major technology companies built their own virtual consultation platforms, eroding Teladoc’s competitive moat and siphoning away market share that once seemed defensible.

This erosion is most visible within BetterHelp, Teladoc’s virtual mental health and therapy platform. What once served as the company’s primary growth engine has deteriorated noticeably—paying subscriber counts are declining, and revenue momentum has reversed. Management has pursued insurance coverage expansion for BetterHelp, hoping to unlock broader patient adoption, but meaningful traction remains elusive.

Teladoc’s acquisition strategy has similarly disappointed. The company acquired UpLift, a virtual mental health platform with substantial insured patient coverage, hoping this would catalyze growth. So far, integration benefits have failed to materialize meaningfully. International expansion represents another strategic pillar, and while certain international markets showed accelerated growth in recent quarters, Teladoc will likely encounter the same competitive pressures and margin challenges it faces domestically as those markets mature.

The company’s structural challenges—commoditization of telemedicine services, entrenched competition from better-capitalized competitors, and persistent difficulty achieving profitability—suggest that Teladoc shares may remain under pressure for the foreseeable future.

The Prudent Investor’s Takeaway

Both companies face obstacles that won’t disappear quickly. For investors searching for meaningful total returns in 2026, the risk-reward profile remains decidedly unfavorable. Patience and caution are warranted until clearer evidence emerges that either firm can successfully navigate its respective challenges and restore sustainable profitability.