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Why Is Teladoc (TDOC) Down 16.6% Since Last Earnings Report?
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A month has gone by since the last earnings report for Teladoc (TDOC - Free Report) . Shares have lost about 16.6% in that time frame, underperforming 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 the most recent earnings report in order to get a better handle on the important catalysts.
Teladoc Q4 Earnings Meet Estimates, Revenues Beat
Teladoc Health, Inc. reported fourth-quarter 2018 loss of 35 cents per share, in line with the Zacks Consensus Estimate. The reported figure was lower than the year-ago quarter’s loss of 50 cents per share and below the company’s own forecast range of a loss of 36 cents to 3 cents per share. The decline in losses was supported by an increase in revenues partly offset by a rise in expenses.
Strong Operating Performance
The company’s revenues of $122.7 million surpassed the Zacks Consensus Estimate by 2.25% and soared 59% year over year.
Revenues from subscription access fees (which comprised 84% of total revenues) increased 57% year over year to $102.7 million. Within this, subscription fees from the United States accounted for $78.3 million or 76% of total access fees (up 41% year over year), while international subscription fees accounted for the remaining 24% or $24.4 million (up 145%).
The company generated $20 million in visit fee revenues from general and medical visits, representing an increase of 70% year over year.
Gross margins declined to 67.4% from 70.6% in the year-ago quarter as a result of an overall revenue mix shift of its virtual healthcare product offerings.
Total visits of 861,000 were up 86% year over year, due to membership gains in U.S. visit only fee and international visits.
U.S. paid membership of 22.8 million grew 16% year over year.
Total operating expenses in the quarter came in at $100.6 million, representing a surge of 27.3% year over year, primarily led by higher marketing and advertising, technology and development, and legal expenses.
Adjusted EBITDA came in at $5.8 million for the quarter, up 141.7% year over year.
Financial Update
As of Dec 31, 2018, the company had approximately $424 million in cash and short-term investment compared with $43 million as of Dec 31, 2017.
The company’s total debt as of Dec 31, 2018 was $415 million, up 100% year over year.
Full-Year Highlight
The company reported total revenues of $417.9 million, up 79% year over year and above the company’s guided range of $414 million to $416 million.
Net loss of $1.47 per share declined 24% year over year and was below the company’s guided range of loss of $1.48 and $1.50 per share.
Guidance Update
For the first quarter, the company expects total revenues of $126-$129 million and total adjusted EBITDA of $0-$2 million. The company projects total visits between 950,000 and 1050,000. Net loss per share, based on 70.8 million weighted average shares outstanding, is expected to range from a loss of 44 cents to a loss of 46 cents per share.
For full-year 2019, the company expects revenues between $535 million and $545 million and adjusted positive EBITDA between $25 million and $35 million. It projects total U.S. paid membership of approximately 27 million to 29 million, while visit fee only access will be available to approximately 9.8 million individuals. Total visits are expected in the band of 3.6-3.9 million and net loss per share, based on 71.9 million weighted average shares outstanding, is expected to range from $1.52 to $1.66.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -54.33% due to these changes.
VGM Scores
At this time, Teladoc has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile 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. It's no surprise Teladoc has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Why Is Teladoc (TDOC) Down 16.6% Since Last Earnings Report?
A month has gone by since the last earnings report for Teladoc (TDOC - Free Report) . Shares have lost about 16.6% in that time frame, underperforming 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 the most recent earnings report in order to get a better handle on the important catalysts.
Teladoc Q4 Earnings Meet Estimates, Revenues Beat
Teladoc Health, Inc. reported fourth-quarter 2018 loss of 35 cents per share, in line with the Zacks Consensus Estimate. The reported figure was lower than the year-ago quarter’s loss of 50 cents per share and below the company’s own forecast range of a loss of 36 cents to 3 cents per share.
The decline in losses was supported by an increase in revenues partly offset by a rise in expenses.
Strong Operating Performance
The company’s revenues of $122.7 million surpassed the Zacks Consensus Estimate by 2.25% and soared 59% year over year.
Revenues from subscription access fees (which comprised 84% of total revenues) increased 57% year over year to $102.7 million. Within this, subscription fees from the United States accounted for $78.3 million or 76% of total access fees (up 41% year over year), while international subscription fees accounted for the remaining 24% or $24.4 million (up 145%).
The company generated $20 million in visit fee revenues from general and medical visits, representing an increase of 70% year over year.
Gross margins declined to 67.4% from 70.6% in the year-ago quarter as a result of an overall revenue mix shift of its virtual healthcare product offerings.
Total visits of 861,000 were up 86% year over year, due to membership gains in U.S. visit only fee and international visits.
U.S. paid membership of 22.8 million grew 16% year over year.
Total operating expenses in the quarter came in at $100.6 million, representing a surge of 27.3% year over year, primarily led by higher marketing and advertising, technology and development, and legal expenses.
Adjusted EBITDA came in at $5.8 million for the quarter, up 141.7% year over year.
Financial Update
As of Dec 31, 2018, the company had approximately $424 million in cash and short-term investment compared with $43 million as of Dec 31, 2017.
The company’s total debt as of Dec 31, 2018 was $415 million, up 100% year over year.
Full-Year Highlight
The company reported total revenues of $417.9 million, up 79% year over year and above the company’s guided range of $414 million to $416 million.
Net loss of $1.47 per share declined 24% year over year and was below the company’s guided range of loss of $1.48 and $1.50 per share.
Guidance Update
For the first quarter, the company expects total revenues of $126-$129 million and total adjusted EBITDA of $0-$2 million. The company projects total visits between 950,000 and 1050,000. Net loss per share, based on 70.8 million weighted average shares outstanding, is expected to range from a loss of 44 cents to a loss of 46 cents per share.
For full-year 2019, the company expects revenues between $535 million and $545 million and adjusted positive EBITDA between $25 million and $35 million. It projects total U.S. paid membership of approximately 27 million to 29 million, while visit fee only access will be available to approximately 9.8 million individuals. Total visits are expected in the band of 3.6-3.9 million and net loss per share, based on 71.9 million weighted average shares outstanding, is expected to range from $1.52 to $1.66.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -54.33% due to these changes.
VGM Scores
At this time, Teladoc has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile 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. It's no surprise Teladoc has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.