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Teladoc (TDOC) to Report Q4 Earnings: What's in Store?

Telehealth provider, Teladoc Inc.TDOC is scheduled to report fourth-quarter and full-year 2016 results on Jan 27 after the closing bell.

Last quarter, Teladoc beat the Zacks Consensus Estimate by 8.33%. Let's see how things are shaping up for this announcement.

Q4 Flash Back

Teldoc's fourth-quarter and full-year 2016 earnings are likely to demonstrate significant growth in its business driven by its premier consumer engagement capabilities, broad network and scalable platform. We also expect to see increased use of its services, which must have increased visits causing considerable membership growth. Also, the acquisition of HealthiestYou closed in 2016 is expected to result in higher visit and call volume.

All these are expected to result in top-line growth. However, Teladoc is expected to incur an operating loss due to huge expenses on higher advertising, sales, technology and development, general and administrative and depreciation and amortization expenses. The company is in its growth phase and incurring heavy expenditure in the form of substantial investments made to acquire new clients, build its proprietary network of healthcare providers and develop its technology platform. We, however, expect the losses to abate as the company has started to realize leverage from the scale of its operations.

According to the company's guidance, for 2016, it expects year-over-year increase of 59% to $123 million in revenues, 43% to 17.5 million in membership, 65% to 952,000 in total visits and 70 basis points to 5.4% in utilization.

Share Price Performance

The story of the company's consistent growth and expanding business is also shared by its share price performance. In 2016, the company lost 8.13%, but was better off than the Zacks categorized Medical Services industry's loss of 13.3%. The share price decline was due to investors' weariness over net losses registered by the company over the past many quarters. Yet the stock performed better than the sector, which gives hints of optimism over its ability to turn to profits very soon.

Earnings Whispers

Our proven model does not conclusively show that Teladoc is likely to beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP: Teladoc has an Earning ESP of -2.94%. This is because the Most Accurate estimate stands at a loss of 35 cents per share, a penny above the Zacks Consensus Estimate of a loss of 34 cents per share. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank: Teladoc carries a Zacks Rank #3 (Hold) which increases the predictive power. But a negative ESP leaves surprise prediction inconclusive.

We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks That Warrant a Look

Here are some companies from the health care sector that you may consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Anthem Inc. ANTM will report fourth-quarter and full-year 2016 earnings results on Feb 1. The company has an Earnings ESP of +6.29% and a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank(Strong Buy)stocks here .

Molina Healthcare Inc. MOH has an Earnings ESP of +5.33% and a Zacks Rank #2 (Buy). The company is expected to report third-quarter earnings results on Feb 13.

CVS Health Corporation CVS has an Earnings ESP of +0.60% and a Zacks Rank #3. The company is expected to report fourth-quarter and 2016 earnings results on Feb 9.

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CVS Health Corporation (CVS): Free Stock Analysis Report

Teladoc, Inc. (TDOC): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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