Shares of LifeStance Health Group (NASDAQ:LFST), a provider of mental health services, were tanking today in response to a disappointing second-quarter earnings report. The stock was down 47.3% as of 11:57 a.m. EDT on Thursday.


Mental health services have been one of Teladoc Health's (NYSE:TDOC) strongest growth drivers over the past several quarters. As a focused provider of in-person and online mental health services, investors were expecting a strong performance from LifeStance Health after it raised over $800 million in an IPO this June.

During the first three months of 2021, LifeStance Health's operations lost less than $1 million after bringing in $143 million in top-line revenue. The stock is tanking today partly because second-quarter revenue that rose just 12% sequentially to an annualized $642 million didn't keep pace with operating expenses that surged 44% over the same period. 


LifeStance Health also disappointed investors with soft guidance for the second half of 2021. Management told investors to expect top-line revenue to reach $668 million to $678 million.

LifeStance Health used a large chunk of its IPO proceeds to pay down existing debts. As a result, there was just $276 million in cash and cash equivalents on its balance sheet at the end of June. With this in mind, it's probably a good idea to watch this company's story play out from a safe distance.

https://www.fool.com/investing/2021/08/12/why-lifestance-health-group-stock-is-crashing-toda/