We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Teladoc (TDOC) Down 2.1% Since Last Earnings Report?
Read MoreHide Full Article
A month has gone by since the last earnings report for Teladoc (TDOC - Free Report) . Shares have lost about 2.1% 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 drivers.
Teladoc Health Q3 Loss Narrows on Integrated Care Strength
Teladoc Health incurred third-quarter 2023 adjusted loss of 35 cents per share, narrower than the Zacks Consensus Estimate of a loss of 37 cents per share and the prior-year quarter’s figure of a loss of 45 cents per share. The figure also came narrower than the management’s projected range of a loss of 50-40 cents per share
Operating revenues of $660.2 million rose 8% year over year (within management’s expected range of $650-$675 million). Yet, the top line fell short of the consensus mark by a whisker.
The quarterly results benefited on the back of improved access fees as well as solid contributions by the Integrated Care and BetterHelp segments. An expanding membership base within the Integrated Care unit contributed to the quarterly results. However, the upside was partly offset by a decline in visits and escalating expenses, related to higher advertising and marketing costs.
Quarterly Operational Update
Revenues from access fees (which comprised 88.2% of total quarterly revenues) improved 8% year over year to $582.1 million in the third quarter. The figure surpassed the Zacks Consensus Estimate of $576 million and our estimate of $575.6 million.
Teladoc Health reported other revenues of $78.2 million, which advanced 10% year over year but missed the consensus mark of $80 million as well as our estimate of $80.5 million.
On a geographical basis, revenues from the United States amounted to $569.3 million, which accounted for 86.2% of total revenues. The figure grew 7% year over year and beat the Zacks Consensus Estimate of $568 million as well as our estimate of $568.3 million. International revenues of $90.9 million climbed 17% year over year in the quarter under review and came higher than the consensus mark of $88 million as well as our estimate of $87.8 million.
Adjusted EBITDA soared 73% year over year to $88.8 million (exceeding the management’s projected range of $72-$82 million), higher than our estimate of $78.9 million. The adjusted gross margin of 71.8% improved 220 basis points year over year in the quarter under review.
TDOC’s total expenses of $725 million increased 6.1% year over year due to higher advertising and marketing expenses, general and administrative costs as well as acquisition, integration and transformation expenses. The figure came higher than our estimate of $718.7 million.
Segmental Update
The Integrated Care segment generated revenues of $374.4 million, which rose 9% year over year in the third quarter and outpaced the Zacks Consensus Estimate of $371 million as well as our estimate of $369.9 million. The unit’s adjusted EBITDA surged 62% year over year to $62.8 million, higher than our estimate of $44.7 million. Adjusted EBITDA margin was 16.8%.
The BetterHelp segment’s revenues advanced 8% year over year to $285.8 million in the quarter under review. However, the figure missed the consensus mark of $291 million as well as our estimate of $286.2 million. The unit’s adjusted EBITDA of $26 million more than doubled year over year but lagged our estimate of $34.2 million. Adjusted EBITDA margin was 9.1%.
Visits & Memberships
Total visits declined 4% year over year to 4.4 million in the third quarter and missed our estimate of 4.8 million. U.S. Integrated Care Members were 90.2 million as of Sep 30, 2023, which exceeded the management expectation of around 86 million. The figure improved 10% year over year and surpassed our estimate of 86.1 million.
Financial Update (as of Sep 30, 2023)
Teladoc Health exited the third quarter with cash and cash equivalents of $1,030.5 million, which grew 12.2% from the figure at 2022 end. Total assets of $4,328 million dipped 0.4% from the 2022-end level.
Debt amounted to $1,537.8 million, which inched up 0.2% from the figure as of Dec 31, 2022. Total stockholders’ equity of $2,294.1 million decreased 0.6% from the 2022-end level.
TDOC generated operating cash flows of $105.6 million in the third quarter, which soared 67.6% year over year. Free cash flows were recorded at $68 million, which increased more than three-fold year over year. Capex were $37.6 million in the quarter under review, which fell 13% year over year.
4Q23 View
Teladoc Health projects total revenues to be within $658 million and $683 million in the fourth quarter of 2023. Adjusted EBITDA is anticipated to be in the range of $107-$117 million. Net loss per share is estimated to be in the band of 33-23 cents. U.S. Integrated Care Members are forecasted to stay within 89-90 million.
2023 Outlook Revised
Management anticipates revenues to lie within $2,600 million and $2,625 million for 2023, down from the prior guidance of $2,600-$2,675 million. The midpoint of the revised guidance implies a rise of 8.5% from the 2022 figure.
Adjusted EBITDA is estimated to be within $320-$330 million, up from the previous outlook of $300-$325 million. The midpoint of the updated outlook suggests 31.8% growth from the 2022 figure.
Net loss per share is projected to lie in the band of $1.50-$1.40, compared with the earlier view of net loss of $1.60-$1.25 per share. U.S. Integrated Care Members are forecasted to be between 89-90 million this year, up from the previous guidance of around 86 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -32.11% 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 D. However, 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.
Performance of an Industry Player
Teladoc is part of the Zacks Medical Services industry. Over the past month, Elevance Health (ELV - Free Report) , a stock from the same industry, has gained 6.6%. The company reported its results for the quarter ended September 2023 more than a month ago.
Elevance Health reported revenues of $42.48 billion in the last reported quarter, representing a year-over-year change of +7.2%. EPS of $8.99 for the same period compares with $7.53 a year ago.
For the current quarter, Elevance Health is expected to post earnings of $5.60 per share, indicating a change of +7.1% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.6% over the last 30 days.
Elevance Health has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Teladoc (TDOC) Down 2.1% Since Last Earnings Report?
A month has gone by since the last earnings report for Teladoc (TDOC - Free Report) . Shares have lost about 2.1% 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 drivers.
Teladoc Health Q3 Loss Narrows on Integrated Care Strength
Teladoc Health incurred third-quarter 2023 adjusted loss of 35 cents per share, narrower than the Zacks Consensus Estimate of a loss of 37 cents per share and the prior-year quarter’s figure of a loss of 45 cents per share. The figure also came narrower than the management’s projected range of a loss of 50-40 cents per share
Operating revenues of $660.2 million rose 8% year over year (within management’s expected range of $650-$675 million). Yet, the top line fell short of the consensus mark by a whisker.
The quarterly results benefited on the back of improved access fees as well as solid contributions by the Integrated Care and BetterHelp segments. An expanding membership base within the Integrated Care unit contributed to the quarterly results. However, the upside was partly offset by a decline in visits and escalating expenses, related to higher advertising and marketing costs.
Quarterly Operational Update
Revenues from access fees (which comprised 88.2% of total quarterly revenues) improved 8% year over year to $582.1 million in the third quarter. The figure surpassed the Zacks Consensus Estimate of $576 million and our estimate of $575.6 million.
Teladoc Health reported other revenues of $78.2 million, which advanced 10% year over year but missed the consensus mark of $80 million as well as our estimate of $80.5 million.
On a geographical basis, revenues from the United States amounted to $569.3 million, which accounted for 86.2% of total revenues. The figure grew 7% year over year and beat the Zacks Consensus Estimate of $568 million as well as our estimate of $568.3 million. International revenues of $90.9 million climbed 17% year over year in the quarter under review and came higher than the consensus mark of $88 million as well as our estimate of $87.8 million.
Adjusted EBITDA soared 73% year over year to $88.8 million (exceeding the management’s projected range of $72-$82 million), higher than our estimate of $78.9 million. The adjusted gross margin of 71.8% improved 220 basis points year over year in the quarter under review.
TDOC’s total expenses of $725 million increased 6.1% year over year due to higher advertising and marketing expenses, general and administrative costs as well as acquisition, integration and transformation expenses. The figure came higher than our estimate of $718.7 million.
Segmental Update
The Integrated Care segment generated revenues of $374.4 million, which rose 9% year over year in the third quarter and outpaced the Zacks Consensus Estimate of $371 million as well as our estimate of $369.9 million. The unit’s adjusted EBITDA surged 62% year over year to $62.8 million, higher than our estimate of $44.7 million. Adjusted EBITDA margin was 16.8%.
The BetterHelp segment’s revenues advanced 8% year over year to $285.8 million in the quarter under review. However, the figure missed the consensus mark of $291 million as well as our estimate of $286.2 million. The unit’s adjusted EBITDA of $26 million more than doubled year over year but lagged our estimate of $34.2 million. Adjusted EBITDA margin was 9.1%.
Visits & Memberships
Total visits declined 4% year over year to 4.4 million in the third quarter and missed our estimate of 4.8 million. U.S. Integrated Care Members were 90.2 million as of Sep 30, 2023, which exceeded the management expectation of around 86 million. The figure improved 10% year over year and surpassed our estimate of 86.1 million.
Financial Update (as of Sep 30, 2023)
Teladoc Health exited the third quarter with cash and cash equivalents of $1,030.5 million, which grew 12.2% from the figure at 2022 end. Total assets of $4,328 million dipped 0.4% from the 2022-end level.
Debt amounted to $1,537.8 million, which inched up 0.2% from the figure as of Dec 31, 2022. Total stockholders’ equity of $2,294.1 million decreased 0.6% from the 2022-end level.
TDOC generated operating cash flows of $105.6 million in the third quarter, which soared 67.6% year over year. Free cash flows were recorded at $68 million, which increased more than three-fold year over year. Capex were $37.6 million in the quarter under review, which fell 13% year over year.
4Q23 View
Teladoc Health projects total revenues to be within $658 million and $683 million in the fourth quarter of 2023. Adjusted EBITDA is anticipated to be in the range of $107-$117 million. Net loss per share is estimated to be in the band of 33-23 cents. U.S. Integrated Care Members are forecasted to stay within 89-90 million.
2023 Outlook Revised
Management anticipates revenues to lie within $2,600 million and $2,625 million for 2023, down from the prior guidance of $2,600-$2,675 million. The midpoint of the revised guidance implies a rise of 8.5% from the 2022 figure.
Adjusted EBITDA is estimated to be within $320-$330 million, up from the previous outlook of $300-$325 million. The midpoint of the updated outlook suggests 31.8% growth from the 2022 figure.
Net loss per share is projected to lie in the band of $1.50-$1.40, compared with the earlier view of net loss of $1.60-$1.25 per share. U.S. Integrated Care Members are forecasted to be between 89-90 million this year, up from the previous guidance of around 86 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -32.11% 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 D. However, 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.
Performance of an Industry Player
Teladoc is part of the Zacks Medical Services industry. Over the past month, Elevance Health (ELV - Free Report) , a stock from the same industry, has gained 6.6%. The company reported its results for the quarter ended September 2023 more than a month ago.
Elevance Health reported revenues of $42.48 billion in the last reported quarter, representing a year-over-year change of +7.2%. EPS of $8.99 for the same period compares with $7.53 a year ago.
For the current quarter, Elevance Health is expected to post earnings of $5.60 per share, indicating a change of +7.1% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.6% over the last 30 days.
Elevance Health has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.