2 Beaten-Down Stocks That Could Sink Even More in 2026

The market had no love for Sarepta Therapeutics (NASDAQ: SRPT) and Teladoc Health (NYSE: TDOC) last year, as both companies lagged broader equities and lost significant market value. This might make them attractive at current levels if there are good reasons to think they will bounce back.

However, that's hardly the case. Sarepta Therapeutics and Teladoc Health both face significant challenges that might, once again, lead to poor performance in 2026. Here's why neither stock is worth investing in right now.

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1. Sarepta Therapeutics

Last year, Sarepta's shares declined by more than 80% after its most important product faced safety concerns. The biotech company develops medicines for rare diseases, especially Duchenne muscular dystrophy (DMD), a condition that progressively weakens and degrades patients' muscles. Sarepta's gene therapy treatment, Elevidys, is the only one of its therapies to target the underlying causes of DMD.

However, last year, two patients died from liver failure after receiving Elevidys. This led to Sarepta Therapeutics having to include a boxed warning for potential liver injury and liver failure, while restricting access to the medicine in the highest-risk populations, including non-ambulatory DMD patients.

To no one's surprise, demand for the medicine dropped last year. For the full year 2025, Sarepta Therapeutics expects revenue of $1.86 billion. Last year, the company's top line came in at $1.9 billion. Without the issues surrounding Elevidys, the company's sales would have increased significantly.

Sarepta Therapeutics is making various moves to turn the tide. The company is developing newer medicines, for instance, and could see decent clinical progress. Sarepta has several candidates in early stage studies for which it expects some data this year. These efforts could pay off eventually, but these are products that won't hit the market anytime soon, if they ever do at all. They won't help the biotech's financial performance this year or next.

Further, one of Sarepta Therapeutics' pipeline products was also associated with the death of patients last year due to liver failure. Although Sarepta Therapeutics abandoned the development of that candidate, that episode does nothing to assuage the fears of patients and investors. =

In the meantime, Elevidys' prospects remain somewhat uncertain, as does Sarepta Therapeutics' outlook. The stock may not have bottomed out yet. It's best to stay away.

2. Teladoc Health

Teladoc Health, a telemedicine specialist, continues to struggle. Over the past few years, revenue growth has been slow to non-existent, while it has accumulated net losses.

What's going on with the company? Although Teladoc was very popular in the early days of the pandemic, competition has increased significantly since. Even with a brand name that is closely tied to telemedicine, it wasn't difficult for other companies and institutions with large existing ecosystems to create parallel platforms for virtual health consultations, referrals, and prescriptions.

Many did just that, thereby undermining Teladoc's efforts and stealing some of its market share. That's most evident within the company's virtual therapy platform, BetterHelp. It was once its most important growth driver, but it has been bleeding paying members, and its sales have also been moving in the wrong direction.

Teladoc is looking to turn things around. Getting broad insurance coverage for BetterHelp would help attract more patients to the platform, but it hasn't yet reached that level. Various acquisitions it has made have yet to make a dent, too. One of them, that of UpLift, a virtual mental health platform with a large covered population, might be able to help, but it's too early to tell.

Teladoc Health is also looking to expand internationally. And while international revenue has grown faster in recent quarters for Teladoc, it will likely eventually encounter the same issues abroad as it did domestically. That's why Teladoc's shares will likely remain southbound, making it an unattractive stock to buy today.

Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Teladoc Health. The Motley Fool has a disclosure policy.