Meta's Way Up After Hours, but This High-Growth Stock Wasn't as Fortunate

Investors have been caught up in a huge amount of volatility, and that was quite evident in Wednesday's trading session. The market was down at times during the day, soared substantially in the middle of the session, but finally had to settle for flattish performance as gains petered out toward the end of the afternoon. The Dow Jones Industrial Average (^DJI -0.11%) and S&P 500 (^GSPC 0.02%) managed to eke out small gains, but the Nasdaq Composite (^IXIC 0.10%) ended down very slightly.

Data source: Yahoo! Finance.

This has been a busy week for financial results, and the moves in the after-hours trading session were fast and furious. Meta Platforms (META -0.52%) got a lot of attention as the social media giant plotted a course toward a longer-term recovery. But one stock in the software-as-a-service industry saw a huge decline. Below, we'll look more closely at both of those companies and what their latest results say about their respective futures.

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Meta shows signs of life

Shares of Meta have fallen dramatically so far in 2022, but they made a big pop late Wednesday afternoon. The stock was up close to 20% in after-hours trading following its first-quarter financial report.

The numbers from Meta weren't entirely pretty. Revenue rose 7% to $27.9 billion, but a massive 31% rise in total costs and expenses caused net income to plunge 21% to $7.47 billion. That translated to $2.72 per share in earnings, down from $3.30 in the year-earlier period. Year-over-year user growth slowed to a crawl, with key metrics rising just 3% to 6% from where they were in the first quarter of 2021.

As investors have seen from other companies that rely largely on advertising, the market right now is mixed. Meta's family of social media properties delivered 15% more ad impressions during the period. But the average price for each of those ads was down 8% year over year, weighing on sales growth.

Meta shareholders seemed to breathe a sigh of relief with its 2022 guidance, which featured reduced expense estimates and limited impacts on near-term revenue from the war in Ukraine. It's hard to see the report as being intensely bullish for the company, but it was far from the worst-case scenario that many investors seemed to expect.

Teladoc looks unwell

Faring far worse was Teladoc Health (TDOC -0.07%), whose shares plunged 38% in after-hours trading. The telehealth specialist has been under pressure as the influence of the pandemic on its business has lessened, and investors now seem highly uncertain about the company's overall future.

Teladoc's financials did little to provide reassurance. First-quarter revenue was up 25% to $565 million. But the company posted a massive loss of $6.67 billion, working out to a whopping $41.58 per share. It's highly likely that the write-down was tied at least partly to Teladoc's acquisition of Livongo in 2020, although chief financial officer Mala Murthy spoke to the impact of higher interest rates requiring a boost in discount rates used for valuation purposes.

Teladoc also gave downbeat guidance. The company now expects revenue to come in between $2.4 billion and $2.5 billion, which would represent just 18% to 23% sales gains from 2021's final numbers. That's a huge slowdown from the breakneck pace of growth in 2020 and 2021, and it seemed to surprise investors despite the unsustainable nature of those past growth rates.

There are still a lot of questions Teladoc has to answer, and so far, the company hasn't been able to satisfy its shareholders. Until it does, the stock might not recover too far from the massive losses it has suffered.