Teladoc (TDOC  ) shares were more than 10% lower following the company's Q4 earnings despite topping analysts' expectations on the top and bottom line. Teladoc is one of the leading telehealth companies which is a large market that is expected to expand significantly over the coming years.

The pandemic accelerated the size and growth rate of this sector, and Teladoc was a beneficiary as its stock price nearly tripled. However, it's been punished during this bear market in growth stocks as it's down by more than 80% from its February 2021 high and is 40% below its March 2020 level.

The major factor in Teladoc's performance is that for years, the total size of the telehealth market kept growing and low rates and low inflation meant that growth stocks experienced constant multiple inflation. Now, the trend in low rates and low inflation has reversed, while there is more competition in the telehealth market.

Inside the Numbers

In Q4, Teladoc reported a loss of $0.07 per share which was significantly less than expectations of a loss of $0.59 per share. And, it was a major improvement from last year's loss of $3.07 per share. Revenue came in at $554.2 million, a 45% increase from last year, topping expectations of $548 million.

Revenues from access fees, which make up the bulk of revenues, grew 51% to $470 million. Visit fees generated $68.9 million in revenue, a 21% increase. The company's gross margin also increased by 50 basis points due to lower than expected costs.

Total visits on the platform reached 4.4 million which was a 41% increase from last year. It currently has 53.6 million paid memberships, a 3% increase from the last year, while fee-only access membership increased 14% to 24.2 million.

In Q1, Teladoc forecasts revenue between $565 million and $571 million and total visits between 4.3 million and 4.5 million. For the full year, it sees revenue between $2.55 billion and $2.65 billion which equates to a 22% improvement from 2021.

Overall, Teladoc shares remain expensive with a $10 billion market cap and $2 billion in revenue despite its decline. The company's results were better than expected but there is clear evidence of deceleration which should concern investors. Only those who are supremely confident in Teladoc's ability to become the dominant company in the space should consider investing.