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Teladoc Provides Strong Preliminary Results & 2018 Outlook

Zacks Equity Research
Updated

Teladoc Inc. TDOC posted impressive preliminary fourth-quarter and full-year 2017 results.

Fourth-quarter revenues of $76 million were up 103% year over year and were higher than the guidance of $75-$77 million. Total adjusted EBITDA totaled approximately $2.5 million compared with a loss of around $8 million in the year-ago quarter, higher than guidance of $1-2 million. Reported total visits of 460,000 was up 48% year over year and surpassed the higher level of its guidance of 4,00,000-4,50,000.

Full-year 2017 revenues of $232 million were up 88% year over year ( within the guidance of $231-$233 million). Total membership was approximately 23 million, up 31% year over year, which met the high end of its guidance of 22.6-23 million. Total visits were approximately 1,460,000, up 53% increase year over year, which surpassed the higher range of its guidance of 1,400,000-1,450,000.

The company's preliminary results were impressive given that it was able to meet and beat its guidance on different fronts.

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The company also provided a strong 2018 outlook. It expects total revenues of $350-$360 million, up 52% year over year (at the midpoint); total adjusted EBITDA of $7-$10 million, up169% year over year (at the midpoint); total membership of 22-24 million, up 20% on a year-over-year basis (at the midpoint). The company expects visit fee only access to 18 million individuals compared with nil in 2017.

A favorable earnings and strong outlook indicates thriving business which is witnessing revenues, membership, clients and visit growth. Demand for the company’s telehealth services is growing. Acquisitions have also supported Teladoc’s organic growth.

Until third-quarter 2017, the company persistently reported negative EBIDTA, thanks to huge development marketing and investments. However, the company delivered on its promise of a breakeven EBIDTA in the fourth quarter. Moreover, its 2018 guidance calls for a positive EBIDTA which instills investors’ optimism in the company.

The company’s shares have soared 107% in a year, significantly outpacing its industry’s rally of 2.8%. Considering the favorable preliminary results and solid 2018 earnings outlook, we believe the stock to continue with its bull run in the upcoming quarters.

Zacks Rank & Stocks to Consider

Teladoc carries a Zacks Rank #3 (Hold). A few better-ranked players in the healthcare space are Centene Corp. CNC, Magellan Health, Inc. MGLN Molina Healthcare Inc. MOH. All of them sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. 

Centene beat estimates in each of the trailing four quarters with an average positive surprise of 10.6%.

Magellan Health gave positive surprise in three of the trailing four quarters with an average of 0.86%.

Molina Healthcare surpassed earnings estimates in two of the trailing four quarters with an average positive surprise of 108%.

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Molina Healthcare Inc (MOH) : Free Stock Analysis Report
 
Magellan Health, Inc. (MGLN) : Free Stock Analysis Report
 
Centene Corporation (CNC) : Free Stock Analysis Report
 
Teladoc, Inc. (TDOC) : Free Stock Analysis Report
 
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Zacks Investment Research