Will You Sell Teladoc (TDOC) For Reduced Earnings Visibility?
Zacks Investment Research | Sep 25, 2016 11:04PM ET
On Sep 23, 2016, telehealth insurer Teladoc Inc. (NYSE:TDOC) was downgraded to a Zacks Rank #4 (Sell), reflecting reduced earnings visibility.
Teladoc incurred significant losses in each reported period since its inception. It incurred net loss of $58.0 million, $17.0 million and $6.0 million for the years ended Dec 31, 2015, 2014 and 2013, respectively. As of Dec 31, 2015, the company had an accumulated deficit of $130.5 million.
These losses and accumulated deficit stemmed from substantial investments made by the company to acquire new clients, build its proprietary network of healthcare providers and develop its technology platform. In 2016, the company is expected to report net loss per share of $1.47 to $1.52.
The company intends to continue scaling its business to increase its clients, members and provider base, broaden its service offerings, and expand its technology applications to make its services easily accessible to members. Accordingly, the company anticipates that cost of revenues and operating expenses will increase substantially in the near future.
These initiatives may prove more expensive than what is currently estimated by the company and may not succeed in increasing its revenues sufficiently to offset high expenses. For 2016, Teladoc is expected to report a loss of $48–$50 million and net loss per share, based on 42.2 million weighted average shares outstanding, between $1.47 and $1.52.
The company’s prior losses, combined with its expected future losses, have had and will continue to have an adverse effect on its stockholders’ equity and working capital.
TELADOC INC Price and Consensus
.AMN Healthcare Services carries a Zacks Rank #2 and has seen a 3.1% rise in its 2016 Zacks Consensus Estimate to $2.31 earnings per share over the past 60 days. On average, the company delivered a positive earnings surprise of 21.3% in the trailing four quarters.
Healthways carries a Zacks Rank #2. Its Zacks Consensus Estimate for earnings per share has surged to $2.11 from just 24 cents over the past 60 days. The company delivered a positive earnings surprise of 1587.5% on average, in the trailing four quarters.
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