It has been about a month since the last earnings report for Teladoc (TDOC). Shares have added about 0.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Teladoc due for a pullback? 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’s Earnings Surpass Estimates in Q1
Teladoc Health, Inc. reported first-quarter 2019 loss of 43 cents per share, narrower than the Zacks Consensus Estimate of loss of 44 cents per share.
The reported figure was wider than the year-ago quarter’s loss of 39 cents per share but narrower than the guided range of a loss of 44 to 46 cents per share.
The loss can be attributed to higher operating expenses than revenues.
Strong Operating Performance
The company’s revenues of $128.6 million surpassed the Zacks Consensus Estimate by 0.34% and soared 43% year over year.
Revenues from subscription access fees (which comprised 82% of total revenues) increased 48% year over year to $106 million. Within this, subscription fees from the United States accounted for $81 million or 76% of total access fees (up 33% year over year), while international subscription fees accounted for the remaining 28% or $25 million (up 133%).
The company generated $22.6 million in visit fee revenues from general and medical visits, representing an increase of 26% year over year.
Gross margin declined to 65.3% from 70% in the year-ago quarter as a result of an overall revenue mix shift of its virtual healthcare offerings.
Total visits of 1,063,000 were up 75% year over year, due to membership gains in U.S. visit only fee and international visits.
U.S. paid membership of 26.7 million grew 28.2% year over year.
Total operating expenses in the quarter came in at $106.8 million, representing a surge of 30% year over year, primarily led by higher marketing and advertising, technology and development, and legal expenses.
Adjusted EBITDA came in at $1.2 million for the quarter, compared with an adjusted EBIDTA loss of $1.4 million in the year-ago quarter.
As of Mar 31, 2019, the company had approximately $434 million in cash and short-term investment, up 2.4% from 2018 end level.
Total debt as of Mar 31, 2019 was $421 million, up 1.4% from Dec 31, 2018 levels.
For the second quarter, the company expects total revenues of $128-$131 million and total adjusted EBITDA of $5-$7 million. The company projects total visits between 775,000 and 875,000. Net loss per share, based on 72.4 million weighted average shares outstanding, is expected to range from a loss of 42 to 44 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 10 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.
Currently, Teladoc has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of F on the value side, putting it in the fifth 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.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions looks promising. 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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