Teladoc Health (TDOC -1.62%), the leader in virtual healthcare, is slated to report its second-quarter 2020 results after the market close on Wednesday, July 29.
Investors are probably approaching the report with much optimism. The COVID-19 pandemic has lit a fire under demand for remote healthcare consultations, as was evidenced when Teladoc reported its first-quarter results in late April.
In 2020, Teladoc stock has soared 167% through Wednesday, July 22, making it one of the year's top performing large-cap stocks, or stocks that have market caps of at least $10 billion. Certainly, a lot of strong future growth is already baked into the stock price, so the company needs to keep delivering outstanding numbers and a bright outlook or risk its stock sinking.
Here's what to watch when Teladoc reports.
Image source: Getty Images.
Key numbers
| Metric | Q2 2019 Result | Teladoc's Q2 2020 Guidance | Teladoc's Projected Change (YOY) | Wall Street's Q2 2020 Consensus Estimate | Wall Street's Projected Change (YOY) |
|---|---|---|---|---|---|
|
Revenue |
$130.3 million |
$215 million to $225 million |
65% to 73% |
$220.7 million |
69% |
|
Adjusted earnings per share |
($0.41) |
($0.28) to ($0.23) |
Loss expected to narrow 32% to 44% |
($0.23) |
Loss expected to narrow 44% |
Data sources: Teladoc Health and Yahoo! Finance. YOY = year over year. Wall Street estimates as of July 22.
In the first quarter, Teladoc's revenue was $180.8 million. So the company expects sequential revenue growth of nearly 22%.
For context, in Q1, revenue jumped 41% year over year to $180.8 million. Growth was driven by total visits in the quarter rocketing 92% year over year (and 67% sequentially) to 2 million. The pandemic-related surge in demand largely came in the last month of the quarter, March. That's when the World Health Organization (WHO) declared the outbreak a pandemic and when most U.S. states and many countries issued stay-at-home orders.
As for Q1's bottom line, net loss narrowed 2% year over year to $29.6 million, which translated to net loss per share narrowing 7% to $0.40. The reason the loss didn't improve as much as one might expect given the surge in revenue is that the company had to spend money to quickly ramp up capacity.
Investors can likely expect a huge pandemic effect in at least the first two months of Q2, while it's possible the effect wasn't as pronounced in June. Many states started reopening their economies in late May.
Guidance
The market looks ahead. So the reaction to Teladoc's report will probably hinge more on the company's guidance than on its Q2 results, relative to Wall Street's expectations.
For the third quarter, Wall Street is currently modeling for a loss per share of $0.26 on revenue of $216.9 million. This represents a 7% narrowing of the loss per share and 57% revenue growth over the year-ago period.
As for full-year 2020, here's the company's current outlook:
- Revenue in the range of $800 million to $825 million, or growth of 45% to 49% year over year
- Total visits of 8 million to 9 million, or growth of 95% to 120%
- Net loss per share of $1.27 to $1.13, or loss narrowing 8% to 18%
