Teladoc stock faces turbulence with shrinking Q4 losses but modest 2022 guidance

Teladoc stock fell in after-hours trading Tuesday after the telehealth giant posted fourth-quarter earnings, despite results exceeding Wall Street’s expectations on profit and revenue.

The stock briefly rebounded Wednesday morning along with the rest of the market as investors moved to correct losses after the U.S. and other Western nations imposed sanctions on Russia, before falling again below Tuesday’s market close.

The company reported a net loss of $10.9 million in the fourth quarter of 2021, or a loss of seven cents per share, dwarfing Wall Street’s projections of a loss of 59 cents per share.

That leaves Teladoc with a full-year loss of $428.8 million or $2.73 per share, compared with a loss of $485.1 million or $5.86 per share in 2020.

The company also beat analysts’ revenue projections, with fourth-quarter revenue at $554.2 million bringing full-year revenue to $2.03 billion, an 86% year-over-year increase.

But analysts remain cautious about Teladoc’s performance as the telehealth giant projected first-quarter 2022 and full-year revenue below expectations.

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The company anticipates first-quarter revenue between $565 and $571 million and full-year revenue between $2.55 billion and $2.65 billion.

Teladoc also predicts losses to widen in the first quarter to between 50 and 60 cents per share.

The stock’s price dip following the results reflects a steady downward trend for the company’s shares, which suffered considerably in 2021, plummeting 54% compared with the S&P 500’s 27% gain.

Since the start of 2022, Teladoc’s shares have fallen more than 40%.

During the company’s fourth-quarter earnings call Tuesday evening, analysts focused on growth in Teladoc’s direct-to-consumer mental health services unit, BetterHelp, which pulled in $700 million in global revenue last year.

Chief Financial Officer Mala Murthy attributed much of the rise in utilization of the company’s services, from 16% in Q4 2020 to 22.7% in Q4 2021, to the success of the mental health brand.

BetterHelp’s customer acquisition costs have also fallen slightly as the company improves retention which, as one analyst noted during the Q&A portion of the call, some of Teladoc’s competitors have seen issues with.

“Unsurprisingly, just given the total addressable market that is out there and the fact that we are absolutely the leader in mental health, the scale that we have in mental health is something that is helpful for us in attracting providers in getting to the economics and the executive that we are demonstrating in our numbers,” Murthy said.

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The company also announced the launch of its chronic condition management program, Chronic Care Complete, last week, which takes a data-driven approach to connect members in the company’s chronic care programs with its network of physicians.

Members can access the program through their health plans or employers.

The move builds upon the telehealth giant’s previous efforts in chronic care management, following its 2020 acquisition of Livongo for $18.5 billion.

The company also rolled out myStrength Complete in 2021 as a unified mental health care platform for its B2B customers.

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“Chronic Care Complete will allow us to leverage our data capabilities, including the billions of data points we’ve collected to date to make intelligent interventions, drive better outcomes for our members and lower costs for our clients,” CEO Jason Gorevic said.

Teladoc is further expanding its primary care offering Primary360 this year to commercial health plans, employers and other payers, starting with Aetna and Centene’s virtual-first health plans.

The company’s U.S. paid membership saw a modest 3% growth last year, rising from 2020’s 51.8 million to 53.6 million by the end of 2021.

The company projects full-year 2022 membership between 54 and 56 million.

Adjusted EBITDA for the fourth quarter was $77.1 million, yielding full-year adjusted EBITDA of $126.8 million, up 111% from 2020.