Teladoc
Like Livongo, Teladoc was one of the premier stocks during the pandemic. For one, it was a growth stock, which was in fashion due to pessimism about economic growth prospects and the Fed's ultra-dovish monetary policies. And, the company was experiencing a massive surge in use and growth due to the pandemic. However, as the world has returned closer to normal, the stock plunged lower, hurting many growth investors including Cathie Wood who has been a large holder of Teladoc in her ARK funds.
Inside the Numbers
In Q2, Teladoc reported a loss of $19.22 per share due to the write-off. Even negating this, the company had a decline in EBITDA of 30% to $46.7 million as the company faced higher than expected costs related to advertising and marketing. Revenue was up 18% to $592.4 million with the major factors being a 20% increase in access fee revenue and a 7% increase in visit fees.
It's remarkable that Teladoc continues to grow, albeit at a much slower pace. For the quarter, it saw a 9% increase in paid memberships to 56.6 million. Telehealth visits were also up 32% to 3.6 million. However, it's also a reminder of the importance of valuation as investors had expectations for much faster growth.
Equally concerning for investors is that Teladoc bought Livongo for $18.5 billion, and it's already written off about $10 billion of its value. The intention was to enhance and differentiate Teladoc's platform by combining telehealth with Livongo's devices to manage and monitor chronic conditions. Given recent trends and market conditions, more write-offs are not out of the question.
For the full year, Teladoc slightly lowered its guidance. It sees between $2.4 billion and $2.5 billion in revenue and adjusted EBITDA between $240 million and $265 million.
