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Teladoc (TDOC) to Report Q3 Earnings: What's in the Cards?

Zacks Equity Research

Teladoc Health, Inc. TDOC, the global leader in virtual care, will release third-quarter 2019 results on Oct 30, 2019, after market close.

The Zacks Consensus Estimate stands at a loss of 40 cents per share. The company had reported loss of 34 cents in the year-ago quarter. The consensus mark for revenues is pegged at $136.18 million, indicating 23% increase from the year-ago period reported figure.

In the last reported quarter, Teladoc Health sustained a loss of 41 cents per share, which was a penny wider than the Zacks Consensus Estimate of a loss of 40 cents per share.  The loss can be attributed to higher operating expenses than revenues.

Higher visit revenues, which are attributable to increased adoption of virtual care and benefits from the company’s diversification strategy, are likely to have aided the company’s third-quarter performance.

The acquisition of Advance Medical, made last year, is likely to have benefited the company’s revenues by increasing membership in the quarter under review.

Teladoc’s Behavioral Health business is likely to have been one of the strongest drivers of visit growth in the third quarter. The company might have witnessed increased engagement in its business-to-business service in terms increased number of visits.

In its Health Plan business, the company is likely to have witnessed growth in terms of new distribution and penetration of existing relationships in the to-be-reported quarter. This area continues to diversify with wins in new lines of business, population and geographies both commercial and government programs.  

Teladoc recently expanded its relationship with a major Blues plan and continued to increase penetration into its largest client's books of business, where its sales velocity is healthy and on track with expectations. This is likely to have benefited the company’s performance in the to-be-reported quarter.

Teladoc is likely to have witnessed higher visit fee revenue driven by increase in U.S. paid membership visits as well as individuals with visit-fee-only access in the third quarter. The U.S. paid membership visits include revenues from general medical visits as well as other specialty visits primarily comprised of expert medical and commercial behavioral health services. The balance of visit fee revenue is primarily comprised of the company’s visit-fee-only access.

Operating expenses are likely to have increased in the third quarter as the company continued to gain from operating leverage.

Company’s Guidance

For the third quarter of 2019, the company expects total revenues between $135 million and $138 million and an EBITDA loss in the range of $10.5-$12.5 million. Adjusted EBITDA is projected between $7 million and $9 million, total U.S. paid membership is expected in the range of 28.5 million to 29.5 million and visit-fee-only access to be available to approximately 10 million individuals.

Total visit is expected between 800,000 and 900,000 in the quarter and net loss per share between a loss of $0.40 and $0.42, based on 72.3 million weighted average shares outstanding.

Earnings Surprise History

The company boasts an attractive earnings surprise history, having surpassed estimates in three of the four reported quarters with an average positive surprise of 4.4%. This is depicted in the graph below:

Teladoc Health, Inc. Price and EPS Surprise


Teladoc Health, Inc. Price and EPS Surprise

Teladoc Health, Inc. price-eps-surprise | Teladoc Health, Inc. Quote

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Teladoc this season. 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. But that’s not the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -0.69%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Currently, the company carries a Zacks Rank #3.

Stocks Worth a Look

Here are a few healthcare stocks worth considering as these have the right combination of elements to beat on earnings in the upcoming quarterly results.

Amgen Inc. AMGN has an Earnings ESP of +0.04% and a Zacks Rank of 3.

You can see the complete list of today’s Zacks #1 Rank stocks here.

ACADIA Pharmaceuticals Inc. ACAD has an Earnings ESP of +5.44% and a Zacks Rank 3.

Mednax Inc. MD has an Earnings ESP of +1.1% and carries a Zacks #3.

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