Mohit Oberoi
Teladoc (NYSE: TDOC) stock is trading lower in US premarket price action today after the company reported a massive loss in the fourth quarter of 2022 and also provided tepid guidance.
Teladoc reported revenues of $637.7 million which was 15% higher YoY. The revenues were slightly ahead of the $633 million that analysts were expecting. In the full year, the company’s revenues rose 18% to $2.40 billion.
Like fellow stay-at-home winners, TDOC’s revenue growth has also come down. Its revenues rose 98% and 86% respectively in 2020 and 2021. However, its growth stalled in 2022.
Teladoc reported a per-share loss of $23.49 in the fourth quarter and $84.60 in the full year. The losses were almost entirely driven by noncash impairment charges which totaled $23.26 per share in Q4 and $83.01 in the full year.
Looking at absolute numbers, the company took an impairment charge of $3.81 billion in the fourth quarter. It booked an impairment charge in all four quarters last year and in total reported a $13.4 billion impairment charge in the year.
Growth Stocks Have Crashed amid Fed’s Rate Hikes
To put that in perspective, the company’s market cap is just around $4.8 billion. Like other growth stocks, TDOC also slumped last year as Fed’s rate hikes took the sheen off tech and growth names.
The Fed has been raising rates to tame inflation. While high inflation is invariably a negative for stocks, some investment strategies can outperform in periods of high inflation.
In his prepared remarks, TDOC CEO Jason Gorevic said, “Despite a challenging macro environment, we were able to expand our product offerings and enhance the level of care delivered across our integrated whole-person platform.”
Notably, while Teladoc Health posted a massive loss in the year, it reported an adjusted EBITDA of $246.5 million in the year. Also, it posted positive free cash flows of $16.5 million in the year. The company ended 2022 with total cash and cash equivalents of $918.2 million.
Teladoc guided for revenues between $610 million-$625 million in the first quarter of 2023 which is below the $652 million that analysts were expecting. Its adjusted EBITDA guidance of $42 million-$50 million also fell short of the $62 million that analysts were expecting.
In the full year, Teladoc Health expects to post revenues between $2.55 billion-$2.675 billion. Analysts were expecting the metric at $2.71 billion. Even at the upper end of its guidance, it expects revenues to rise only about 11% this year.
Teladoc Stock Falls after Massive Loss and Tepid Guidance
Gorevic said, “As we look ahead to 2023, we see a healthy demand for solutions that promise better access and outcomes while lowering the cost of healthcare.”
He added, “Our key strategic priorities remain our whole-person suite of services including our virtual primary care offering – Primary360, our suite of chronic care management solutions, mental health, and continued growth in our BetterHelp consumer brand.”
In response to an analyst’s question on whether the recent job cuts in the US have impacted its membership, TDOC said that so far it hasn’t seen any real impact. The company reported 83.3 million Integrated Care members in the US at the end of 2022, which was 7% higher YoY. The company expects the member count to be between 84 million-86 million by the end of 2023.
Cathie Wood of ARK Invest is among the biggest backers of TDOC and bought more Teladoc Health stock last year amid the plunge. With an 11.7% stake, ARK Investment Management is the biggest stockholder of TDOC.
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This article was written for Business 2 Community by Mohit Oberoi.
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