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Teladoc (TDOC) to Reduce Operating Costs, Shares Fall 6.6%
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Teladoc Health, Inc. (TDOC - Free Report) announced that the company opted for a restructuring plan to improve profitability. It slashed around 6% of its non-clinician workforce, or about 300 workers, and lowered its real estate presence in certain markets to reduce costs.
While the actions taken in the fourth quarter are not expected to have a material impact on its 2022 operating results, it has recognized $4.4 million in pre-tax charges from the restructuring and footprint reduction plans. Per a recent filing, TDOC is expected to book another $17-million charge in 2023, of which around $10 million will come from staff reduction moves.
Shares of the company fell 6.6% yesterday after it announced workforce reduction.
To achieve better returns on investments, it is streamlining the organizational structure and reviewing vendor relationships. These moves come at a time when the company is searching for ways to come out of the red zone and find a sustainable profit-making path. These are expected to turn the company profitable in the coming days and are much needed as investors are somewhat skeptical regarding its aggressive acquisitions and spending choices.
However, the better-than-expected performance from the BetterHelp business in 2022 can be a major positive for the company, justifying its inorganic growth strategy, which was under tough scrutiny following the $6.6-billion impairment charge incurred on the Livongo acquisition. The company expects $1 billion in revenues from its BetterHelp mental health business.
The Zacks Consensus Estimate for 2022 revenues is pegged at $2.4 billion, indicating an 18.3% year-over-year increase. The consensus mark for the 2022 bottom line is pegged at a loss of $61.29 per share, suggesting widening from a loss of $1.33 reported a year ago.
Price Performance
Shares of Teladoc have declined 65.1% in the past year compared with the 24.1% fall of the industry.
The Zacks Consensus Estimate for Biodesix’s 2022 earnings indicates an 11.4% improvement from the prior-year reported number. BDSX has witnessed one upward estimate revision in the past 60 days against none in the opposite direction.
The Zacks Consensus Estimate for Altimmune’s 2022 bottom line indicates a 9.7% improvement from the prior-year reported number. ALT beat earnings estimates in each of the past four quarters with an average surprise of 13.7%.
The Zacks Consensus Estimate for AMN Healthcare’s 2022 bottom line indicates a 44% improvement from the prior-year reported number. The consensus estimate for AMN’s top line suggests 30.1% year-over-year growth.
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Teladoc (TDOC) to Reduce Operating Costs, Shares Fall 6.6%
Teladoc Health, Inc. (TDOC - Free Report) announced that the company opted for a restructuring plan to improve profitability. It slashed around 6% of its non-clinician workforce, or about 300 workers, and lowered its real estate presence in certain markets to reduce costs.
While the actions taken in the fourth quarter are not expected to have a material impact on its 2022 operating results, it has recognized $4.4 million in pre-tax charges from the restructuring and footprint reduction plans. Per a recent filing, TDOC is expected to book another $17-million charge in 2023, of which around $10 million will come from staff reduction moves.
Shares of the company fell 6.6% yesterday after it announced workforce reduction.
To achieve better returns on investments, it is streamlining the organizational structure and reviewing vendor relationships. These moves come at a time when the company is searching for ways to come out of the red zone and find a sustainable profit-making path. These are expected to turn the company profitable in the coming days and are much needed as investors are somewhat skeptical regarding its aggressive acquisitions and spending choices.
However, the better-than-expected performance from the BetterHelp business in 2022 can be a major positive for the company, justifying its inorganic growth strategy, which was under tough scrutiny following the $6.6-billion impairment charge incurred on the Livongo acquisition. The company expects $1 billion in revenues from its BetterHelp mental health business.
The Zacks Consensus Estimate for 2022 revenues is pegged at $2.4 billion, indicating an 18.3% year-over-year increase. The consensus mark for the 2022 bottom line is pegged at a loss of $61.29 per share, suggesting widening from a loss of $1.33 reported a year ago.
Price Performance
Shares of Teladoc have declined 65.1% in the past year compared with the 24.1% fall of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Teladoc currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the broader medical space are Biodesix, Inc. (BDSX - Free Report) , Altimmune, Inc. (ALT - Free Report) and AMN Healthcare Services, Inc. (AMN - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Biodesix’s 2022 earnings indicates an 11.4% improvement from the prior-year reported number. BDSX has witnessed one upward estimate revision in the past 60 days against none in the opposite direction.
The Zacks Consensus Estimate for Altimmune’s 2022 bottom line indicates a 9.7% improvement from the prior-year reported number. ALT beat earnings estimates in each of the past four quarters with an average surprise of 13.7%.
The Zacks Consensus Estimate for AMN Healthcare’s 2022 bottom line indicates a 44% improvement from the prior-year reported number. The consensus estimate for AMN’s top line suggests 30.1% year-over-year growth.