The remote healthcare provider, Teladoc Health Inc. (TDOC) shares slumped in the after-hours on April 27 following its latest earnings. The company’s Q1 2022 earnings had investors spin a sell-off which led to a decline of 36.83% in the session. Thus, the stock tumbled down to a price of $35.37 apiece in the after-hours while 6.74 million shares exchanged hands. This steep decline came after a slight loss of 3.08% in the prior session.
TDOC’s Q1 2022 Analysis
The company’s Q1 2022 earnings took a harsh hit from a non-cash goodwill impairment charge of $6.6 billion. Associated with the value loss of assets, not many details were shared about the impairment charge. However, it caused the company’s net loss to reach $6.67 billion with a loss per share of $41.58. Analysts were expecting a loss of just $0.60 per share while the prior year’s loss stood at $1.31 per share.
Moreover, TDOC did show a 25% YOY improvement in its revenue which reached $565.4 million in the first quarter of 2022. But despite the YOY growth, revenue also fell short of the expected $568.7 million for the quarter.
Slashed Outlook
Given the huge impairment charge and much deeper-than-expected loss, on top of market dynamics, the company has significantly slashed its outlook for the full-year 2022. The new projections have the revenue ranging from $2.4 billion to $2.5 billion against the previous $2.55-$2.65 billion.
Furthermore, the EBITDA was revised from $18-$48 million to a negative $7-$52 million for the year. The net loss is expected to result in negative earnings of $43.50 to $43.00 per share.
TDOC’s CEO, Jason Gorevic deemed the higher advertising costs and lower-than-expected yield of marketing spend as well as elongated cycles of employer and health plans to be added reasons for the revised outlook.
What Happened with TDOC?
TDOC was one of the pandemic darlings as it accumulated immense gains from the digital transformation amid the outbreak. With the uptick in demand due to the pandemic, the stock also saw a huge upsurge. But the post-pandemic reality hit it hard as its shares fell after the speculative bubble busted. The company is now facing many headwinds and its growth has declined as well. However, the market for telehealth is bullish with an increase of 32% expected by 2028. If the company breaks free from the current headwinds, with the growing scope of telehealth, it would have a bullish future as well.
Conclusion
With a much deeper-than-expected loss on top of a revenue miss, TDCO stock suffered a blow in the after-hours on Wednesday. The company’s slashed outlook was another reason for the steep decline of the stock.
