Challenges Ahead for Teladoc Health

Shares of Teladoc Health took a hit as the online healthcare company reported mixed results and guidance for the quarter.

Details of the Report

• Stock Performance: Teladoc stock dropped 22% to $16.08 in premarket trading, while S&P 500 futures were down 0.3%.
• Fourth Quarter: The company posted a loss of 17 cents per share, beating Wall Street's forecast of a 22 cents loss.
• Revenue: Teladoc's revenue of $660.5 million fell short of estimates at $670.8 million.
• Segment Performance: Integrated Care segment revenue rose by 8%, while revenue for BetterHelp remained flat.
• Analyst's View: Despite the results, analysts from William Blair deemed it a solid performance for the company.

Future Outlook

• First Quarter Projections: Teladoc expects revenue between $630 million to $645 million, with a net loss per share ranging from 45 cents to 55 cents.
• Analyst Expectations: Analysts had forecasted revenue of $647 million and a loss of 44 cents per share.

In conclusion, Teladoc Health faces challenges ahead but is making strides despite a slower organic growth period in the post-pandemic landscape.

Teladoc's 2024 Revenue Expectations and Forecast Analysis

Teladoc, a leader in virtual healthcare services, anticipates revenue for the 2024 year to be between $2.635 billion and $2.735 billion, with a net loss per share ranging from 80 cents to $1.10. This projection slightly missed analysts' expectations, who had predicted revenue of $2.7 billion and a loss of $1.05 per share.

Three-Year Consolidated Revenue Growth Forecast

Teledoc has also provided a three-year forecast indicating a low to mid-single-digit annual consolidated revenue growth. Despite this, Needham analysts led by Ryan MacDonald deemed the yearly guidance as "disappointing," yet highlighted "promising levers for operating leverage over the three-year outlook." They have maintained their Hold rating in a Wednesday report.

Teledoc CEO's Insights on Virtual Urgent Care Market

On the earnings call, Teledoc CEO Jason Gorevic offered insights into the broader sector, stating that most U.S. healthcare consumers now have access to virtual urgent care, making it primarily a replacement market. Despite this, Gorevic expressed Teladoc's confidence in consistently gaining market share, albeit acknowledging that the market is well-penetrated. Consequently, he anticipates that revenue growth from U.S. virtual care products will exhibit low single-digit growth moving forward, with approximately half of the Integrated Care segment being stable but showing lower growth potential.