What's In Store For Teladoc (TDOC) This Earnings Season?

Teladoc Inc. (NYSE:TDOC) is scheduled to report first-quarter 2017 results on May 8, after market close.

Last quarter, Teladoc beat the Zacks Consensus Estimate by 11.43%. Let’s see how things are shaping up for this announcement.

Q1 Flash Back

Teldoc’s first-quarter earnings are likely to demonstrate significant growth in its business driven by its premier consumer engagement capabilities, broad network and scalable platform. We also expect to see increased use of its services, which must have propelled visits causing considerable membership growth. Also, the acquisition of HealthiestYou closed in 2016 is expected to result in higher visits and call volume.

All these are expected to result in top-line growth in the first quarter. However, the bottom line will see a drain from huge expenses on higher advertising, sales, technology and development, general and administrative functions, and depreciation and amortization. The company is in its growth phase and incurring heavy expenditure in the form of substantial investments made to acquire new clients, build its proprietary network of healthcare providers and develop its technology platform. We, however, expect the expenditures to reduce as the company has started to realize leverage from the scale of its operations.

For the first quarter of 2017, the company projects total revenue between $41.5 million and $42.5 million, EBITDA loss between $14 million and $15 million and adjusted EBITDA loss between $10 million and $11 million. The loss might stem from the seasonal impact of higher on-boarding expenses from millions of new members, total membership of approximately 20 million to 20.5 million, total visits between 375,000 and 385,000 and net loss per share based on 52.1 million weighted average shares outstanding of 33 cents to 34 cents.

Earnings Whispers

Our proven model does not conclusively show that Teladoc is likely to beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP: Teladoc has an Earning ESP of 0.00%. This is because the Most Accurate estimate stands at a loss of 33 cents per share, in line with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Teladoc carries a Zacks Rank #4 (Sell). We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks That Warrant a Look

Here are some companies that you may consider as our model shows that these have the right combination of elements to post an earnings beat on May 8:

Northern Oil and Gas, Inc. (NYSE:NOG) has an Earnings ESP of +50.00% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cobalt International Energy, Inc. (NYSE:CIE) has an Earnings ESP of +15.38% and a Zacks Rank #3.

DHT Holdings, Inc. (NYSE:DHT) has an Earnings ESP of +9.52% and a Zacks Rank #3.

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