Will Teladoc (TDOC) Incur Lower-Than-Estimated Loss In Q2?

Telehealth provider, Teladoc Inc. (NYSE:TDOC) is scheduled to report second-quarter 2016 results on Aug 3 after the closing bell.

Last quarter, Teladoc missed the estimate by 5.26%. Let’s see how things are shaping up for this announcement.

Why a Likely Positive Surprise?

Our proven model shows that Teladoc is likely to post lower-than-expected loss and will beat estimates as it has the right combination of the two key components. Note that a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or #2 (Buy) or at least #3 (Hold) to have a significantly higher chance of beating estimates.

Zacks ESP: The Earnings ESP for Teladoc is +5.13%. This is because the Most Accurate estimate of a loss of 37 cents is narrower than the Zacks Consensus Estimate of a loss of 39 cents.

Zacks Rank: Teladoc’s Zacks Rank #2 increases the predictive power of ESP.

Factors to Drive Q2 Results

Teldoc – engaged in offering consumers virtual visits with physicians through voice or video – went public last July and got listed on NYSE. The company is therefore 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.

Thus Teladoc is expected to post an operating loss on the back of huge expenses on higher advertising, sales, technology and development, general and administrative and depreciation and amortization expenses. While we expected to see a surge in revenues, total visits as well as membership led by the recent acquisitions of – Stat Health Services Inc, Compile, Inc. “BetterHelp”, AmeriDoc, and Consult A Doctor – which have expanded its distribution capabilities and broadened its service offering. But the increase in expenses will outdo top-line growth.

As of Dec 31, 2015, the company had an accumulated deficit of $130.5 million. For full-year 2016, Teladoc is expected to report a net loss per share of $1.22 to $1.27.

TELADOC INC Price and EPS Surprise

Other Stocks That Warrant a Look

Here are some other financial companies which you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat this quarter:

Prudential Financial, Inc. (NYSE:PRU) has an Earnings ESP of +0.40% and carries a Zacks Rank #3. The company is slated to report second-quarter earnings results on Aug 3.

Manulife Financial Corporation (NYSE:ALL) has an Earnings ESP of +2.94% and carries a Zacks Rank #3. The company is expected to report second-quarter earnings results on Aug 4.

Sun Life Financial Inc. (TO:SLF) has an Earnings ESP of +1.47% and carries a Zacks Rank #2. The company is expected to report second-quarter earnings results on Aug 10.