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Will High Tech Costs Hurt Teladoc Health (TDOC) in Q2 Earnings?
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Teladoc Health, Inc. (TDOC - Free Report) is scheduled to release second-quarter 2023 results on Jul 25 after the market close.
Q2 Estimates
The Zacks Consensus Estimate for Teladoc Health’s second-quarter earnings per share is pegged at a loss of 44 cents, which remains flat year over year but is a bit narrower than the management's guidance of a loss of 45-55 cents.
The consensus mark for revenues stands at $649 million, suggesting 9.6% growth from the year-ago quarter’s reported number and is well within the management’s outlook of $635-$660 million.
Earnings Surprise History
Teladoc Health boasts a solid earnings surprise history. Its bottom line beat estimates in each of the trailing four quarters, the average surprise being 26.01%. This is depicted in the chart below:
In the second quarter, the top line of Teladoc Health is expected to have benefited on the back of higher access fees and increased patient visits. Our estimate for access fees is pegged at $565.1 million, which indicates an improvement of 8.9% from the prior-year quarter’s reported figure. The same for total visits stands at 5.1 million, suggesting 8.8% growth year over year.
Strong performance in the Integrated Care and BetterHelp segments is likely to have provided an impetus to TDOC’s overall revenues in the to-be-reported quarter. Results of the Integrated Care unit are expected to have gained from sustained demand for whole person care product suite and an increase in chronic care enrollments.
Our estimate for Integrated Care’s revenues implies 5% growth year over year, while the same for the segment’s adjusted EBITDA suggests 20.6% growth from the prior-year quarter’s reported number. We also expect U.S. Integrated Care Members at 85.2 million in the second quarter, which is within the management’s guidance of 84.5-85.5 million.
However, average revenue per U.S. Integrated Care Member is likely to have suffered due to the mix effect of large telemedicine populations included in the past 12 months. Our estimate for the metric indicates almost a 2% year-over-year decline.
Expanding customer base and steady customer acquisition cost are likely to have buoyed the performance of the BetterHelp segment in the to-be-reported quarter.
We estimate the unit’s revenues to witness 15.9% growth year over year in the second quarter. Our estimate for BetterHelp’s adjusted EBITDA indicates a surge of 42.7% from the prior-year quarter’s reported number, while the same for BetterHelp Paying Users implies a 25.2% rise from that reported a year ago.
However, Teladoc Health’s margins are likely to have taken a hit in the to-be-reported quarter due to higher advertising and marketing and, technology and development expense levels. We expect technology and development costs to escalate 12.2% year over year in the second quarter. Our estimate indicates advertising and marketing expenses to rise 6% year over year.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict an earnings beat for Teladoc Health this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here, as you can see below.
Earnings ESP: Teladoc Health has an Earnings ESP of -8.87% because the Most Accurate Estimate of a loss of 48 cents per share is wider than the Zacks Consensus Estimate of a loss of 44 cents. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: TDOC currently carries a Zacks Rank of 3.
Stocks to Consider
While an earnings beat looks uncertain for Teladoc Health, here are some companies from the Medical space, which according to our model, have the right combination of elements to beat on earnings this time around:
The Zacks Consensus Estimate for JAZZ’s second-quarter 2023 earnings is pegged at $4.48 per share, indicating a rise of 4.2% from the prior-year quarter’s reported figure.
The consensus mark for JAZZ Pharmaceuticals’ second-quarter earnings has moved 0.2% north over the past 30 days.
Humana Inc. (HUM - Free Report) has an Earnings ESP of +0.25% and a Zacks Rank of 2, currently. The Zacks Consensus Estimate for HUM’s second-quarter 2023 earnings is pegged at $8.88 per share, suggesting 2.4% growth from the year-ago quarter’s reported figure.
Humana’s bottom line beat estimates in each of the trailing four quarters, the average surprise being 8.87%.
Centene Corporation (CNC - Free Report) has an Earnings ESP of +0.94% and a Zacks Rank of 3, currently. The Zacks Consensus Estimate for CNC’s second-quarter 2023 earnings is pegged at $2.05 per share, indicating a 15.8% increase from the prior-year quarter’s reported figure.
Centene’s earnings beat estimates in two of the trailing four quarters and missed the mark twice, the average surprise being 0.59%.
Image: Shutterstock
Will High Tech Costs Hurt Teladoc Health (TDOC) in Q2 Earnings?
Teladoc Health, Inc. (TDOC - Free Report) is scheduled to release second-quarter 2023 results on Jul 25 after the market close.
Q2 Estimates
The Zacks Consensus Estimate for Teladoc Health’s second-quarter earnings per share is pegged at a loss of 44 cents, which remains flat year over year but is a bit narrower than the management's guidance of a loss of 45-55 cents.
The consensus mark for revenues stands at $649 million, suggesting 9.6% growth from the year-ago quarter’s reported number and is well within the management’s outlook of $635-$660 million.
Earnings Surprise History
Teladoc Health boasts a solid earnings surprise history. Its bottom line beat estimates in each of the trailing four quarters, the average surprise being 26.01%. This is depicted in the chart below:
Teladoc Health, Inc. Price and EPS Surprise
Teladoc Health, Inc. price-eps-surprise | Teladoc Health, Inc. Quote
Factors to Note
In the second quarter, the top line of Teladoc Health is expected to have benefited on the back of higher access fees and increased patient visits. Our estimate for access fees is pegged at $565.1 million, which indicates an improvement of 8.9% from the prior-year quarter’s reported figure. The same for total visits stands at 5.1 million, suggesting 8.8% growth year over year.
Strong performance in the Integrated Care and BetterHelp segments is likely to have provided an impetus to TDOC’s overall revenues in the to-be-reported quarter. Results of the Integrated Care unit are expected to have gained from sustained demand for whole person care product suite and an increase in chronic care enrollments.
Our estimate for Integrated Care’s revenues implies 5% growth year over year, while the same for the segment’s adjusted EBITDA suggests 20.6% growth from the prior-year quarter’s reported number. We also expect U.S. Integrated Care Members at 85.2 million in the second quarter, which is within the management’s guidance of 84.5-85.5 million.
However, average revenue per U.S. Integrated Care Member is likely to have suffered due to the mix effect of large telemedicine populations included in the past 12 months. Our estimate for the metric indicates almost a 2% year-over-year decline.
Expanding customer base and steady customer acquisition cost are likely to have buoyed the performance of the BetterHelp segment in the to-be-reported quarter.
We estimate the unit’s revenues to witness 15.9% growth year over year in the second quarter. Our estimate for BetterHelp’s adjusted EBITDA indicates a surge of 42.7% from the prior-year quarter’s reported number, while the same for BetterHelp Paying Users implies a 25.2% rise from that reported a year ago.
However, Teladoc Health’s margins are likely to have taken a hit in the to-be-reported quarter due to higher advertising and marketing and, technology and development expense levels. We expect technology and development costs to escalate 12.2% year over year in the second quarter. Our estimate indicates advertising and marketing expenses to rise 6% year over year.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict an earnings beat for Teladoc Health this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here, as you can see below.
Earnings ESP: Teladoc Health has an Earnings ESP of -8.87% because the Most Accurate Estimate of a loss of 48 cents per share is wider than the Zacks Consensus Estimate of a loss of 44 cents. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: TDOC currently carries a Zacks Rank of 3.
Stocks to Consider
While an earnings beat looks uncertain for Teladoc Health, here are some companies from the Medical space, which according to our model, have the right combination of elements to beat on earnings this time around:
Jazz Pharmaceuticals plc (JAZZ - Free Report) has an Earnings ESP of +0.45% and a Zacks Rank of 1, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for JAZZ’s second-quarter 2023 earnings is pegged at $4.48 per share, indicating a rise of 4.2% from the prior-year quarter’s reported figure.
The consensus mark for JAZZ Pharmaceuticals’ second-quarter earnings has moved 0.2% north over the past 30 days.
Humana Inc. (HUM - Free Report) has an Earnings ESP of +0.25% and a Zacks Rank of 2, currently. The Zacks Consensus Estimate for HUM’s second-quarter 2023 earnings is pegged at $8.88 per share, suggesting 2.4% growth from the year-ago quarter’s reported figure.
Humana’s bottom line beat estimates in each of the trailing four quarters, the average surprise being 8.87%.
Centene Corporation (CNC - Free Report) has an Earnings ESP of +0.94% and a Zacks Rank of 3, currently. The Zacks Consensus Estimate for CNC’s second-quarter 2023 earnings is pegged at $2.05 per share, indicating a 15.8% increase from the prior-year quarter’s reported figure.
Centene’s earnings beat estimates in two of the trailing four quarters and missed the mark twice, the average surprise being 0.59%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.