It has been about a month since the last earnings report for Teladoc (TDOC Quick QuoteTDOC - Free Report) . Shares have lost about 0.2% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Teladoc due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Teladoc Beats Q1 Earnings, Revenues Miss

Teladoc reported first-quarter 2022 adjusted loss of 47 cents per share, narrower than the Zacks Consensus Estimate of a loss of 55 cents. However, TDOC delivered adjusted earnings per share of 13 cents a year ago.

TDOC’s operating revenues of $565.4 million (almost in line with the lower end of management’s expected range of $565-$571 million) missed the Zacks Consensus Estimate of $571 million. The top line improved from $453.7 million in the year-ago quarter.

The better-than-expected first-quarter earnings were supported by increased visits and memberships as well as higher utilization. Solid contribution from access and visit fees benefited the results. The positives were partially offset by a rise in expenses due to massive impairment charges.

Even though TDOC reported an earnings beat, management scaled down some major full-year guidances. Investors might not have liked the fact that TDOC expects its adjusted EBITDA to decline and net loss to surge, while total visits are likely to grow.

Operational Update

Revenues from access fees (which comprised 86.9% of total revenues) increased 29% year over year to $491.3 million. Within this, access fees from the United States jumped 29% year over year to $421.1 million and accounted for 85.7% of total access fees. International access fees made up the remaining 14.3% and amounted to $70.2 million (up 29% year over year).

TDOC generated $67.9 million of visit fee revenues (up 12% year over year) in the quarter under review. While visit fee revenues from the United States advanced 13% year over year to $64.5 million, revenues from international visits totaled $3.5 million (up 2%).

Adjusted EBITDA declined to $54.5 million from $56.6 million a year ago and was within the management’s projected range of $51-$55 million.

Adjusted gross margin fell 90 basis points year over year to 66.9% for the first quarter.

Total expenses surged to $7,234.7 million from $538.4 million a year ago, primarily due to goodwill impairment charges of $6,600 million in the first quarter. Teladoc also witnessed higher cost of revenues, advertising and marketing, and technology and development expenses, partially offset by lower expenses related to sales, and general and administrative.

Visits & Memberships

Total visits of 4.5 million (match the higher end of the expectation of 4.3-4.5 million) improved 35% year over year on account of 39% and 25% increase in visits from the United States and International segments, respectively.

Teladoc ended the quarter with U.S. paid membership of 54.3 million, which rose 5% year over year. U.S. visit fee-only access membership climbed 14% year over year to 25.2 million at the first-quarter-end.

Utilization (the ratio of visits to total U.S. paid members) increased 593 bps year over year to 23.4%.

Financial Update (as of Mar 31, 2022)

Teladoc exited the first quarter with cash and cash equivalents of $836.4 million, which decreased from $893.5 million at 2021 end.

Total debt was $1.5 billion, which increased from the 2021-end figure of $1.2 billion.

In the first quarter, net operating cash outflow amounted to $31.7 million, which deteriorated from $18 million a year ago.

Guidance

Second Quarter

For second-quarter 2022, TDOC expects total revenues of $580-$600 million and adjusted EBITDA within $39-$49 million. Teladoc projects total visits between 4.4 million and 4.6 million. Net loss per share is expected within 60-72 cents.

2022

For the full year, revenues are anticipated between $2.40 billion and $2.50 billion, lower than previous guidance of $2.55 billion and $2.65 billion. The new guidance is still higher than the 2021 level of $2 billion.

Adjusted EBITDA is now estimated to be $240-$265 million, lower than the previous expectation of $330-$355 million and down from the 2021 figure of $267.8 million. Its bet on mental health service BetterHelp is likely to generate lower yield this year.

Teladoc projects total visits in the band of 18.5-19.5 million, tightened from the previous guidance of 18.5-20 million (still indicating a rise from the 2021 level of 15.4 million).

Total U.S. paid membership is expected between 54 million and 56 million members (suggesting growth from the 2021 level of 53.6 million). U.S. visit fee-only access is now projected to be available to around 25 million individuals (compared with the 2021 figure of 24.2 million).

Net loss per share is now expected to be $43-$43.5, wider than the previous estimate of $1.40-$1.60. The same also indicates deterioration from the 2021 loss figure of $2.73 per share.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

The consensus estimate has shifted -55.8% due to these changes.

VGM Scores

At this time, Teladoc has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Teladoc has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.