Why Is TDOC Stock Crashing After Hours? | TDOC Stock Earnings

TL;DR

TDOC stock is under pressure after hours because Teladoc remains unprofitable, continues to dilute shareholders, and recorded a $3 billion goodwill impairment charge despite beating revenue expectations. Quarterly revenue reached $592 million versus the expected $586 million, while shares outstanding rose from 27 million to 160 million. Read on for the full breakdown of its earnings, valuation, balance sheet, and uncertain path to profitability.

Transcript

best friend in the world has 5.19 of her fund in teludak this is my friend kathy wood this is sarcasm if you do the show i'm paul i'm a value investor kathy wood hates value investors until her stocks fall then she says they're in deep value territory and then she sells all of them because she doesn't get investing so i'm here to talk about teledoc... Read More

Key Insights

• ❓ Teledoc's revenue growth has been remarkable, reaching $592 million, but it has not translated into profitability.
• 🤪 Share dilution is a significant concern for investors, as the number of shares outstanding has increased fivefold since the company went public.
• ❓ The volatility of Teledoc's stock price indicates market uncertainty and the impact of speculation.
• 🤨 The company's heavy reliance on impairment charges raises questions about its financial stability and accounting practices.
• 🤨 Kathy Wood's investment in Teledoc raises concerns, considering her track record and the company's lack of profitability.
• 🍉 Teledoc's current stock price may seem attractive, but investors should consider the company's long-term profitability potential.
• 😘 The company's debt level is relatively low, but its significant liabilities and lack of profitability raise concerns about its financial health.

Questions & Answers

Q: Why is TDOC stock crashing after hours following its earnings report?

The analysis points to Teladoc’s continuing lack of profitability, shareholder dilution, and a $3 billion goodwill impairment charge. These concerns remained even though quarterly revenue of $592 million beat the expected $586 million.

Q: What revenue did Teladoc report, and did it beat expectations?

Teladoc reported $592 million in quarterly revenue, beating the expected $586 million. Revenue was up 18% from $503 million in the prior-year period.

Q: How much did Teladoc lose after excluding the impairment charge?

Teladoc reported a $3.1 billion loss, including a $3 billion impairment charge. Excluding that charge, the loss was approximately $101 million, although the speaker notes that compensation and other expenses also affected the result.

Q: How volatile has TDOC stock been?

TDOC traded as high as $156 and as low as $27 during the preceding year. At the time of the analysis, it was trading after hours at $37.32.

Q: Why is Teladoc’s share dilution a concern?

Teladoc’s shares outstanding increased from 27 million when it went public to 160 million. The speaker explains that this substantially reduced the portion of the company represented by each earlier share.

Q: Has Teladoc’s revenue growth produced profits?

The company grew from $9 million in revenue in 2014 to $2.14 billion in the previous year, but the speaker says it has never made money. He argues that investors must determine how Teladoc could become profitable before buying the stock.

Q: What does Teladoc’s balance sheet show?

The speaker describes Teladoc’s debt as relatively low and cites $1.2 billion in cash. He also notes $1.95 billion in total liabilities and $1.6 billion in long-term liabilities.

Q: Does the analysis consider TDOC stock a speculative investment?

Yes, the speaker calls TDOC a speculative play because the company is not currently profitable. He says a prospective investor would need to build a model showing how the business could make money, and he does not see a clear path to profitability.

Summary & Key Takeaways

• Teledoc reported revenue of $592 million, beating expectations of $586 million, showing an 18% increase from the previous year. However, they incurred a significant impairment charge, resulting in a net loss of $101 million.

• The stock price of TDOC has seen extreme volatility, reaching as high as $156 and as low as $27. Currently, it is trading at $37.32.

• Share dilution is a major concern, with the number of shares outstanding increasing from 27 million to 160 million. The company's revenue growth and lack of profitability raise questions about its valuation and potential for future profitability.