NEW YORK - Teladoc Health Inc. (NYSE:TDOC) shares fell sharply by more than 18% as the company announced the withdrawal of its financial outlook for the full year of 2024 and its three-year forecast for both its consolidated operations and operating segments.
In the second quarter of 2024, Teladoc reported revenue of $642 million, a 2% decrease from the same quarter last year, falling short of the analyst consensus of $649.49 million.
The company posted a significant net loss of $837.7 million, or -$4.92 per share, which included a substantial goodwill impairment charge of $790 million, or -$4.64 per share. Despite these losses, Teladoc's adjusted EBITDA saw a 24% increase YoY, reaching $89.5 million.
The Integrated Care segment demonstrated resilience with a 5% revenue increase YoY to $377.4 million and an adjusted EBITDA margin of 17.0%. However, the BetterHelp segment experienced a downturn, with revenue declining 9% YoY to $265 million and an adjusted EBITDA margin of 9.6%.
Needham analysts reiterated a Hold rating on the stock "following another disappointing quarter."
"While commentary suggests a strong Integrated Care pipeline, given the deterioration in the BetterHelp business. we believe it is prudent to remain on the sidelines," analysts added.
Analysts at Truist Securities shared similar comments:
"We believe the company's decision to withdraw its outlook at this juncture was more likely driven by the company's recent leadership transition."
"While valuations were always seen as a downside support for TDOC shares, the lack of both NT and LT clarity on almost half of the company's business is unlikely to help."
CEO Chuck Divita expressed optimism about leading Teladoc Health forward, emphasizing the company's strong foundation and talented workforce.
"While we achieved solid performance in the Integrated Care segment, continued headwinds in the BetterHelp segment impacted overall results," said Divita. He highlighted the company's commitment to enhancing execution and streamlining operations to better serve customers and stakeholders.
The market's negative response, indicated by the 10% drop in share price, reflects investor concerns following the withdrawal of guidance, which is often interpreted as a lack of confidence in future performance.
Teladoc's adjusted earnings per share (EPS) for the quarter were -$0.28, which was slightly better than the analyst estimate of -$0.34. Despite this beat on EPS, the withdrawal of guidance and the revenue miss have overshadowed the company's earnings performance.
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