More than a month has gone by since the last earnings report for Teladoc, Inc. (TDOC - Free Report) . Shares have added about 3.2% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? 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 Q2 Loss Wider than Expected
Teladoc's second-quarter 2017 operating loss of 28 cents per share was wider than the Zacks Consensus Estimate of a loss of 26 cents. In the year-ago quarter, the company had incurred a loss of 38 cents per share.
Total revenue of $45 million not only surpassed the Zacks Consensus Estimate of $44 million but also grew 68% year over year. The figure is at the highest point of the company’s guided range of $44–$45 million.
Revenues from subscription access fees and visit fees were $37.5 million and $7.1 million, respectively, reflecting an increase of 74% and 44% year over year. The increase in subscription fees reflects overall membership expansion and total visit growth.
Total visits of 309,000 surged 55% year over year and total membership was 20.5 million, reflecting an increase of 33%. Both of these were at the higher end of the company’s guided range of 290,000–310,000 and 20–21.5 million, respectively.
Total operating expenses were $49 million, 44% higher year over year. The rise was due to increased expenditure on advertising & marketing, sales, technology & development, acquisition related costs, general & administrative expenses as well as depreciation & amortization costs.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) narrowed to a loss of $5.1 million from a loss of $10.5 million, in the year-ago quarter, and came in better than the company’s guided range of a loss of $6 million to $7 million.
Teldoc’s total assets were approximately $674 million as of Jun 30, 2017, up more than 100% from $303.7 million as of Dec 31, 2016.
Total cash, cash equivalents and marketable securities were $409 million as of Jun 30, 2017, up from $50 million as of Dec 31, 2016.
Net loss per share, based on 56.5 million weighted average shares outstanding, is expected to be between a loss of 56and 58 cents in the third quarter.
Revenues are expected to be in the range of $67–$68 million.
Adjusted EBITDA is expected to be in the range of a loss of $2–$3 million.
Membership is expected to be between 22.0 million and 22.5 million.
Total visits are projected within the range of 275,000–300,000.
Net loss per share, based on 55.1 million weighted average shares outstanding, is expected to be between a loss of $1.52 and $1.55.
Revenues are expected to be in the range of $230–$235 million.
Adjusted EBITDA is expected to be in the range of a loss of $15–$17 million and the company targets to achieve positive adjusted EBITDA in the fourth-quarter of 2017.
Membership is expected to lie within 22.5–23.0 million.
Total visits are projected to be between 1,400,000 and 1,450,000
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been two revisions lower for the current quarter.
At this time, the stock has a nice Growth Score of B, though its Momentum is doing a bit better with an A. However, the stock was allocated a grade of F on the value side, putting it in the lowest 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.
The company's stock is more suitable for momentum investors than growth investors.
Estimates have been broadly trending downward for the stock and the magnitude of this revision also indicates a downward shift. It's no surprise that the stock has a Zacks Rank #4 (Sell). We are expecting a below average return from the stock in the next few months.