Why Is Teladoc (TDOC) Up 19% Since Its Last Earnings Report?

A month has gone by since the last earnings report for Teladoc, Inc. TDOC. Shares have added about 19% in that time frame.

Will the recent positive trend continue leading up to its next earnings release, or is TDOC 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 drivers.

Teladoc Loss Lower Than Expected, '18 View Intact

Teladoc's first-quarter 2018 operating loss of 39 cents per share was narrower than the Zacks Consensus Estimate of a loss of 43 cents. In the year-ago quarter, the company had incurred a loss of 30 cents per share.
Better-than-expected earnings were driven by an increase in revenues led by higher visits and membership.

Strong Operational Performance

Total revenues of $89.6 million not only surpassed the Zacks Consensus Estimate by 3% but also surged 109% year over year. Revenues are also above the company’s guidance of $86-$88 million. Quote

Revenues from visits increased 109% year over year to $17.9 million. Total visits of 606,000 surged 57% year over year. The total U.S. paid membership was 20.8 million, reflecting an increase of 41% year over year.

Total operating expenses were $81.88 million, 79.6% 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) was a loss of 1.4 million compared with a loss of $9.1 million in the year-ago quarter.

Financial Position

Teladoc’s total assets were approximately $817.5 million as of Mar 31, 2018, down from $824.4 million as of Dec 31, 2017.

Total cash, cash equivalents were $65.2 million as of Mar 31, 2018, up 52.3% from Dec 31, 2017.

Second-Quarter 2018 Guidance

Net loss per share, based on 62.6 million weighted average shares outstanding, is expected between 35 cents and 37 cents. Revenues are expected to be $86-$87 million and adjusted EBITDA are anticipated to be $1.5-$2.5 million.

The total U.S. paid membership is expected between 20.8 million and 21 million, and visit fee only access should be 18-18.5 million individuals.
Total visits are projected between 450,000 and 500,000.

2018 Guidance Kept Intact

The company expects net loss per share, based on 62.8 million weighted average shares outstanding, between $1.36 and $1.41; revenues of $350 million to $360 million; adjusted EBITDA between $7 million and $10 million and total U.S. paid membership of 22 million-24 million.
Total visits are projected between 1.9 million and 2 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. There have been three revisions higher for the current quarter compared to six lower.

Teladoc, Inc. Price and Consensus

 

Teladoc, Inc. Price and Consensus | Teladoc, Inc. Quote

VGM Scores

At this time, TDOC has a subpar Growth Score of D. Its Momentum 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 bottom 20% quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

The company's stock is suitable solely for momentum based on our styles scores.

Outlook

Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Notably, TDOC has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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