Why Is Teladoc (TDOC) Up 10.3% Since Its Last Earnings Report?

It has been about a month since the last earnings report for Teladoc, Inc. TDOC. Shares have added about 10.3% 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 its most recent earnings report in order to get a better handle on the important drivers.

Teladoc  Q4 Loss Wider Than Expected, Revenues Beat

Teladoc Inc. fourth-quarter 2017 operating loss of 50 cents per share was wider than the Zacks Consensus Estimate of a loss of 40 cents. In the year-ago quarter, the company had incurred a loss of 31 cents per share.

Strong Operational Performance    

Total revenues of $77 million not only surpassed the Zacks Consensus Estimate of $76 million but also surged 106% year over year. This is above the company’s preliminary reported revenues of $76 million. The increase in top line was driven mainly by a 115% rise in revenues from subscription access fees to $65.4 million, which benefited from the acquisition of Best Doctors.

Revenues from visits increased 68% year over year to $11.8 million. Total visits of 464,000 surged 54% year over year. Total U.S. paid membership was 23.2 million, reflecting an increase of 33% year over year.

Total operating expenses were $78.98 million, 94.5% 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 $2.4 million compared with the loss of $10.6 million in the year-ago quarter. The company, which was till the third quarter of 2017 posting negative EBIDTA (due to huge development marketing and investments quite common for a company in its inception phase, which outpaced revenue growth), delivered on its promise of a breakeven EBIDTA in the fourth quarter.

Financial Position

Teladoc’s total assets were approximately $824.4 million as of Dec 31, 2017, up from $303.7 million as of Dec 31, 2016.

Total cash, cash equivalents were $42.8 million as of Dec 31, 2017, down 14.4% year over year.

First Quarter 2018 Guidance

Net loss per share, based on 61.9 million weighted average shares outstanding, is expected between 43 cents and 45 cents. Revenues are expected in the range of $86-$88 million; adjusted EBITDA in the range of loss of $2.5-$3.5 million.  

Total U.S. paid membership is expected between 19.5 million and 20 million, and visit fee only access should be within 9.0-9.25 million individuals.

Total visits are projected between 575,000 and 625,000.

2018 Guidance

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 within 22 million to 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 two 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 and a grade with the same score on the momentum front. 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 F. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate investors will probably be better served looking elsewhere.

Outlook

Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Interestingly, 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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