Virtual healthcare provider Teladoc Health (NYSE:TDOC) has been a favorite stock pick of Cathie Wood, CEO of Ark Invest. After shares dropped 18% on Thursday from second quarter financial results, Wood defended the pick and bought the dip.

What Happened: Shares of Teladoc Health fell Thursday after second quarter results. The company reported second quarter revenue of $592.4 million, which was up 18% year-over-year and came in ahead of Street estimates.

Investors were unimpressed with the company's forward guidance and sent shares down after the report. The company said it expects revenue to come in the lower end of revenue guidance of $2.4 billion to $2.5 billion for the fiscal year.

"While we continue to see increased uncertainty in the macroeconomic backdrop, we remain confident in our ability to execute against our strategy," Teladoc CEO Jason Gorevic said.

Related Link: Why Teladoc Health Stock Is Tanking Today 

Wood Defends And Buys More: A weekend email is sent out that provides comments on positions in the Ark Invest ETFs that have double-digit moves during the week. Teladoc was one of the stocks covered in the report, with Wood saying investors might be underestimating the company.

"We believe that other investors are concerned that Teladoc will not be able to deliver on the steep ramp in EBITDA it is forecasting for the fourth quarter," Wood said. "We estimate that Teladoc will have to generate 43% of its annual EGBITDA target by way of lower advertising in the holiday quarter."

Wood points outs that Teladoc got 48% of its annual EBITDA in the fourth quarter in 2019.

"We note that most key operating metrics in the quarter affirmed our long-term thesis that Teladoc will become a premier enterprise partner for hybrid care delivery in the U.S. and perhaps elsewhere."

Wood notes that member additions and chronic care enrollment figures from Teladoc for the second quarter were ahead of analysts' expectations.

"Today, 30% of chronic care enrollees use multiple Teladoc products."

Four of the Ark Invest ETFs added to their positions of Teladoc on Thursday, with over 400,000 shares bought on the earnings dip.

As of Friday, here's a look at how Teladoc is represented in the four Ark Invest ETFs:

• Ark Innovation ETF (NYSE:ARKK): 9th largest holding, $425.2 million, 4.44% of assets
• Ark Next Generation Internet ETF (NYSE:ARKW): 10th largest holding, $64.5 million, 4.36% of assets
• Ark Genomic Revolution ETF (BATS:ARKG): 5th largest holding, $135.3 million, 4.77% of assets
• Ark Fintech Innovation ETF (NYSE:ARKF): 12th largest holding, $31.6 million, 3.33% of assets

Together, the four ETFs hold over $656 million of Teladoc stock.

"While consumer sentiment, discretionary spending, and paid search yields have impacted Teladoc's EBITDA margin, we believe these forces are transient, certainly in the context of ARK's five-year investment time horizon."

TDOC Price Action: Teladoc shares closed at $36.83 on Friday, versus a 52-week range of $27.38 to $156.82. Teladoc shares are down 76% over the last year and down 61% year-to-date in 2022.

Photo: Courtesy of teladochealth.com