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Why Teladoc Health Stock Is Shooting Higher Today

By Brian Feroldi - Updated Feb 27, 2020 at 10:48AM

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Shares pop after the company reports better-than-expected results and issues favorable guidance.

What happened

In response to reporting fourth-quarter results, shares of Teladoc Health (TDOC -2.48%), a high-growth company that provides telehealth services, jumped as much as 27% in early-morning trading on Thursday. The stock was up about 18% as of 10:25 a.m. EST.

So what

The headline numbers from the quarter looked great: 

  • Revenue increased 27% to $156.5 million. That was about 2% higher than what analysts had modeled.
  • Total visits grew 44% to 1.23 million.
  • U.S. paid membership surged 61% to 36.7 million.
  • Gross margin fell 280 basis points to 64.6%.
  • Adjusted EBITDA soared 162% to $15.2 million.
  • Net loss declined to $19 million, or $0.26 per share. That was well below the net loss per share of $0.33 that Wall Street was looking for. 

The numbers for the full year 2019 were also solid: 

  • Revenue grew 32% to $553 million.
  • Adjusted EBITDA expanded 137% to $31.8 million.
  • Net loss expanded slightly to $98.9 million, or $1.38 per share.
Doctor holding tablet with patient face on screen.

Image source: Getty Images.

Teladoc Health's CEO, Jason Gorevic, stated:

We demonstrated outstanding performance in the fourth quarter and full year of 2019 as we reported record results that were at the high end or exceeded our expectations on all key metrics. Our diversified growth strategies are driving strong growth across our channels. Looking forward, we are well positioned with significant momentum to extend our leadership position and to meet the increasing demand for our comprehensive service offering.

Shares popped in response to the strong growth across the board.

Now what

Management shared upbeat guidance for the first quarter of 2020: 

  • Total revenue is projected to be in the range of $169 million to $172 million.
  • Adjusted EBITDA is expected to land between $9 million and $11 million.
  • Net loss per share is expected to land between $0.37 and $0.34.

Market watchers were modeling $164.6 million in revenue and a net loss per share of $0.36, so these numbers look favorable. 

Management also issued guidance for the full year 2020:

  • Total revenue is projected to land between $695 million and $710 million.
  • Adjusted EBITDA is projected to be in the range of $60 million to $70 million.
  • Net loss per share is expected to be between $1.19 and $1.06.

For context, Wall Street was expecting $694.5 million in revenue and a net loss per share of $1.20. 

Brian Feroldi has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Teladoc Health. The Motley Fool has a disclosure policy.

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