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Teladoc (TDOC) Down 20.4% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Teladoc (TDOC - Free Report) . Shares have lost about 20.4% 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 its most recent earnings report in order to get a better handle on the important catalysts.
Teladoc Health Q2 Loss Narrower Than Expected, Up Y/Y
Teladoc Health reported second-quarter 2023 adjusted loss of 40 cents per share, narrower than the Zacks Consensus Estimate of a loss of 44 cents. The bottom line improved 9.1% year over year.
Operating revenues improved 10.1% year over year to $652.4 million (within management’s expected range of $635-$660 million). The top line outpaced the consensus mark by 0.5%.
The quarterly results gained from strong growth in access fees and other revenues coupled with improving segmental profitability of Integrated Care. However, rising advertising and marketing, technology and development expenses partially offset the positives.
Operational Update
Revenues from Access Fees (which comprised 88.2% of total quarterly revenues) amounted to $575.7 million, which increased 11% year over year in the quarter under review. The figure beat our estimate by 1.9%.
TDOC generated $76.7 million of other revenues, which rose 4% year over year. However, the metric missed our estimate by 4.4%.
On a geographical basis, revenues from the United States grew 8% year over year to $561.8 million, which accounted for 86.1% of total revenues. The metric beat our estimate by a whisker. International revenues improved 28% year over year to $90.6 million in the second quarter. The metric beat our estimate by 8.8%.
Adjusted EBITDA of $72.2 million surged 54% year over year. The figure surpassed management’s view of $60-$68 million and beat our estimate by 7.1%.
The adjusted gross margin of Teladoc Health improved 160 basis points year over year to 70.8% in the quarter under review.
Total expenses of $724 million decreased by a huge margin, mainly due to goodwill impairment incurred last year. Sales expenses also declined in the quarter.
Segmental Update
In the quarter under review, TDOC reported revenues of $360 million in its Integrated Care segment. The figure grew 5% year over year. The metric beat our estimate by 0.6%.
BetterHelp segment’s revenues of $292.4 million climbed 18% year over year on the back of new member growth and stable customer acquisition cost in the quarter. The metric beat our estimate by 2%.
Adjusted EBITDA of Integrated Care and BetterHelp amounted to $38 million and $34.2 million, denoting an increase of 29% and 71%, respectively, from their corresponding prior-year quarter’s reported figures. The metric for Integrated Care beat our estimate by 7.3%, while the same for BetterHelp beat the mark by 19.6%.
Visits & Memberships
Total visits were 4.7 million, which remained consistent year over year in the second quarter. The metric missed our estimate by 7.8%.
As of Jun 30, 2023, U.S. Integrated Care Members witnessed an uptick of 7% on a year-over-year basis to 85.9 million (surpassing the expectation of 84.5-85.5 million). The metric beat our estimate by 0.8%.
Financial Update (as of Jun 30, 2023)
Teladoc Health exited the second quarter with cash and cash equivalents of $958.7 million, which increased from $918.2 million at 2022-end. Total assets of $4,316.4 million declined from $4,345.4 at 2022-end.
Debt amounted to $1,537 million, up from $1,535.3 million at 2022-end. Total stockholders’ equity declined 0.5% from 2022-end to $2,295.1 million.
In the quarter under review, net operating cash flow increased 9.4% year over year to $101.2 million. Free cash inflows were $64.6 million, higher than $47.6 million a year ago.
Guidance
Q3
For third-quarter 2023, Teladoc Health anticipates total revenues to be between $650 million and $675 million. Adjusted EBITDA is estimated to be in the range of $72-$82 million. Net loss per share is expected to be in the band of 50-40 cents. U.S. Integrated Care Members are forecasted to be $86 million.
Full Year
TDOC’s management expects revenues for 2023 to be between $2,600 and $2,675 million, the mid-point of which indicates an improvement of 9.6% from the 2022 figure of $2,406.8 million.
Adjusted EBITDA is anticipated to be in the range of $300-$325 million, the mid-point of which suggests 26.8% growth from the 2022 figure of $246.5 million.
Net loss per share is predicted to be in the range of $1.60-$1.25. U.S. Integrated Care Members are expected to be 86 million.
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 -6.46% due to these changes.
VGM Scores
Currently, Teladoc has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. 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.
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Teladoc (TDOC) Down 20.4% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Teladoc (TDOC - Free Report) . Shares have lost about 20.4% 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 its most recent earnings report in order to get a better handle on the important catalysts.
Teladoc Health Q2 Loss Narrower Than Expected, Up Y/Y
Teladoc Health reported second-quarter 2023 adjusted loss of 40 cents per share, narrower than the Zacks Consensus Estimate of a loss of 44 cents. The bottom line improved 9.1% year over year.
Operating revenues improved 10.1% year over year to $652.4 million (within management’s expected range of $635-$660 million). The top line outpaced the consensus mark by 0.5%.
The quarterly results gained from strong growth in access fees and other revenues coupled with improving segmental profitability of Integrated Care. However, rising advertising and marketing, technology and development expenses partially offset the positives.
Operational Update
Revenues from Access Fees (which comprised 88.2% of total quarterly revenues) amounted to $575.7 million, which increased 11% year over year in the quarter under review. The figure beat our estimate by 1.9%.
TDOC generated $76.7 million of other revenues, which rose 4% year over year. However, the metric missed our estimate by 4.4%.
On a geographical basis, revenues from the United States grew 8% year over year to $561.8 million, which accounted for 86.1% of total revenues. The metric beat our estimate by a whisker. International revenues improved 28% year over year to $90.6 million in the second quarter. The metric beat our estimate by 8.8%.
Adjusted EBITDA of $72.2 million surged 54% year over year. The figure surpassed management’s view of $60-$68 million and beat our estimate by 7.1%.
The adjusted gross margin of Teladoc Health improved 160 basis points year over year to 70.8% in the quarter under review.
Total expenses of $724 million decreased by a huge margin, mainly due to goodwill impairment incurred last year. Sales expenses also declined in the quarter.
Segmental Update
In the quarter under review, TDOC reported revenues of $360 million in its Integrated Care segment. The figure grew 5% year over year. The metric beat our estimate by 0.6%.
BetterHelp segment’s revenues of $292.4 million climbed 18% year over year on the back of new member growth and stable customer acquisition cost in the quarter. The metric beat our estimate by 2%.
Adjusted EBITDA of Integrated Care and BetterHelp amounted to $38 million and $34.2 million, denoting an increase of 29% and 71%, respectively, from their corresponding prior-year quarter’s reported figures. The metric for Integrated Care beat our estimate by 7.3%, while the same for BetterHelp beat the mark by 19.6%.
Visits & Memberships
Total visits were 4.7 million, which remained consistent year over year in the second quarter. The metric missed our estimate by 7.8%.
As of Jun 30, 2023, U.S. Integrated Care Members witnessed an uptick of 7% on a year-over-year basis to 85.9 million (surpassing the expectation of 84.5-85.5 million). The metric beat our estimate by 0.8%.
Financial Update (as of Jun 30, 2023)
Teladoc Health exited the second quarter with cash and cash equivalents of $958.7 million, which increased from $918.2 million at 2022-end. Total assets of $4,316.4 million declined from $4,345.4 at 2022-end.
Debt amounted to $1,537 million, up from $1,535.3 million at 2022-end. Total stockholders’ equity declined 0.5% from 2022-end to $2,295.1 million.
In the quarter under review, net operating cash flow increased 9.4% year over year to $101.2 million. Free cash inflows were $64.6 million, higher than $47.6 million a year ago.
Guidance
Q3
For third-quarter 2023, Teladoc Health anticipates total revenues to be between $650 million and $675 million. Adjusted EBITDA is estimated to be in the range of $72-$82 million. Net loss per share is expected to be in the band of 50-40 cents. U.S. Integrated Care Members are forecasted to be $86 million.
Full Year
TDOC’s management expects revenues for 2023 to be between $2,600 and $2,675 million, the mid-point of which indicates an improvement of 9.6% from the 2022 figure of $2,406.8 million.
Adjusted EBITDA is anticipated to be in the range of $300-$325 million, the mid-point of which suggests 26.8% growth from the 2022 figure of $246.5 million.
Net loss per share is predicted to be in the range of $1.60-$1.25. U.S. Integrated Care Members are expected to be 86 million.
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 -6.46% due to these changes.
VGM Scores
Currently, Teladoc has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. 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.