NEW YORK – Shares of Teladoc Health Inc. (NYSE:) fell sharply by more than 18% as the company announced the withdrawal of its full-year 2024 financial guidance and three-year forecast for both its consolidated businesses and operating segments.
In the second quarter of 2024, Teladoc reported revenue of $642 million, down 2% from the same quarter last year, falling short of the analyst consensus of $649.49 million.
The company recorded a significant net loss of $837.7 million, or -$4.92 per share, including a significant goodwill impairment of $790 million, or -$4.64 per share. Despite these losses, Teladoc’s adjusted EBITDA rose 24% year over year to $89.5 million.
The Integrated Care segment showed resilience with revenue up 5% year over year to $377.4 million and an adjusted EBITDA margin of 17.0%. However, the BetterHelp segment saw a decline, with revenue down 9% year over year to $265 million and an adjusted EBITDA margin of 9.6%.
Needham analysts reiterated a Hold rating on the stock “after another disappointing quarter.”
“While the comments indicate a strong pipeline for integrated care, given the deterioration of BetterHelp’s business, we believe it is prudent to remain on the sidelines,” analysts added.
Analysts at Truist Securities shared similar comments:
“We believe the company’s decision to withdraw its guidance at this time was more likely driven by the company’s recent leadership transition.”
“While valuations have always been seen as downside support for TDOC stock, the lack of both NT and LT clarity on nearly half of the company’s business is unlikely to help.”
CEO Chuck Divita expressed optimism about leading Teladoc Health forward, highlighting the company’s strong foundation and talented workforce.
“While we delivered solid performance in the Integrated Care segment, continued headwinds in the BetterHelp segment impacted overall results,” Divita said. He highlighted the company’s commitment to improve execution and streamline operations to better serve customers and stakeholders.
The negative market reaction, evidenced by the 10% decline in the share price, reflects investor concerns after the guidance was withdrawn, which is often interpreted as a lack of confidence in future performance.
Teladoc’s adjusted earnings per share (EPS) for the quarter was -$0.28, which was slightly better than analyst estimates of -$0.34. Despite these earnings per share gains, the withdrawal of guidance and missed revenue have overshadowed the company’s earnings performance.
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