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Will Q2 earnings inject growth into the Teladoc share price?

The Teladoc Health [TDOC] share price has been on a stellar run over recent years, climbing 769.21% since the end of July 2016 (through 23 July 2021). However, so far this year, the Teladoc share price performance of the US telemedicine and virtual healthcare company is less positive.

Since climbing to an all-time high at $308.00 intraday on 16 February, the Teladoc share price has since taken a downturn, falling 50.78% to $151.59 on 23 July. Even a 4.69% recovery in the Teladoc share price over the past week couldn’t help to lift the stock into the green. 


Teladoc's share price rise since end of July 2016


With millions of people staying home or isolating to avoid being infected by coronavirus last year, Teladoc’s telehealth platform offered guaranteed access to a doctor without having to visit in person. Teladoc is now one of the market’s leading providers of remote healthcare, but can it still be profitable in a world where the virus is, if not eradicated, at least brought under control?

And perhaps the key question for potential investors and traders right now is, has the Teladoc share price fallen sufficiently to justify buying into the stock?


Does the Teladoc share price have upside potential post-earnings?

As of 23 July, the Teladoc share price is 28.78% lower than a year ago, when the US and most of the world was still battling the coronavirus pandemic. With the worst now hopefully behind us, particularly in the US and UK, what’s the future likely to be for the virtual in-person care service?

Looking at platform-enabled sessions to gauge active users of its platform, the first three months of this year saw Teladoc report 1.09 million sessions, comfortably down on last year’s 1.44 million during the second quarter. Paid member numbers rose relatively slowly to 51.5 million versus 50 million a year ago, well down on the 7 million new members onboarded during the first quarter of 2020.

Despite the slowdown in these metrics, there are reasons for optimism ahead of Teladoc’s second-quarter earnings announcement. Total visits are expected to grow 27%, even without a requirement to socially isolate, reports the Motley Fool. This shows there is a demand for people to continue using telehealth to access healthcare resources. Meanwhile, last year’s $18.5bn acquisition of the digital chronic care firm, Livongo Health, which was completed in October, has helped to broaden its offering.


Teladoc's predicted total revenue for 2021


Management predicts total revenue for 2021 will grow to $1.97bn, up 80% compared with 2020. Its adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) is also estimated to double, to at least $275m. If the second-quarter release shows the company is on track to meet these annual estimates, it should support “the idea that there’s plenty of upside left for new investors'', according to The Motley Fool’s Alex Carchidi. Carchidi is bullish on the Teladoc share price, saying: “Teladoc is a stock worth holding.”

Further underlining the stock’s potential, Teladoc currently has the third-highest weighting at 5.66% in Cathie Wood’s Ark Innovation ETF [ARKK], behind only Tesla [TSLA] and Roku [ROKU]. The fund, which focuses on companies exhibiting disruptive innovation, gained 152% in 2020 and despite a year-to-date decline of 1.81%, remains up 55.31% over the last 12 months, as of 23 July.


What happened last quarter?

Teladoc’s first-quarter revenue came in at $453.7m, a 151% year-on-year jump and ahead of consensus estimates at $451.9m, while EBITDA leapt 429% against the same period in 2020, to $56.6m from $10.7m.


Teladoc's Q1 revenue - a 151% YoY rise


However, Teledoc reported a net loss of $199.6m for the first quarter versus $29.6m a year earlier. The higher loss included a stock-based compensation of $86.3m associated with Livongo stock awards.


When is Teladoc reporting earnings?

4.30 pm (EST), 27 July.


What is Wall Street expecting?

Teladoc is expected to deliver a year-on-year decline in earnings but higher revenue for the second quarter. Consensus estimates point to a quarterly loss of $0.59 per share, which represents a year-on-year downturn of 73.5%. Revenue is predicted to be at $500.97m, which would equate to a 107.9% jump from the second quarter of 2020.

The 27 analysts tracking the Teladoc share price on CNN have a 12-month price median estimate of $225.00 on the stock, which represents a 48.43% increase from last week’s close of $151.59. With 18 buy ratings, one outperform, 10 holds and one sell, the current consensus among polled analysts with CNN is to buy the Teladoc share price.

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