Thursday's Headlines: Teladoc Posts $3 Billion Loss
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
Chipotle Mexican Grill (CMG) +14.7%
PayPal (PYPL) +12.2%
Spotify (SPOT) +12.2%
Shopify (SHOP) +11.7%
Pinterest (PINS) +11.3%
Moving Down ⬇️
Calavo Growers (CVGW) -2.6%
Coca-Cola (KO) -0.3%
American Tower (AMT) -0.3%
Prologis Inc. (PLD) -0.2%
Here are the stories that you need to know ahead of market-open today, Thursday the 28th of July.
Teladoc Posts $3 Billion Loss ⬇️
Teladoc (TDOC) is down big today after posting multi-billion dollar losses for the second quarter in a row. The company underwent another $3 billion goodwill impairment charge from the Livongo acquisition. A goodwill impairment charge in its most basic terms is an admittance that a company has overpaid for an asset. It is important to realize that it is not a cash loss but a paper loss. That being said, in writing down almost $10 billion over the past few quarters, it is clear that Livongo will not deliver the income that was expected of it at the time of acquisition.
Aside from the blockbuster loss figure, it wasn’t that bad a quarter operationally for Teladoc. Revenue was up 18% year-over-year to $592 million and EBITDA came in at $47 million, both ahead of analyst expectations. CEO Jason Gorevic cited the company’s recently launched primary care offering Primary360 as “a significant bright spot in terms of commercial momentum.” However, its mental health offering BetterHelp, once a key growth driver for the business, is seeing some roadblocks as competitors flood the market.
Teladoc has been suffering since the Livongo acquisition and I would not be surprised to see some leadership changes come soon. The stock is down close to 25% in pre-market trading at time of writing.
Meta Misses The Mark Once Again 😰
Facebook’s parent company Meta (META) posted its quarterly earnings last night and it didn't make for welcome reading for shareholders. The Big Tech firm missed on earnings and revenue, while also posting surprisingly weak guidance for the upcoming quarter. The firm is now trading down close to 6% pre-market on the back of the news.
Meta posted earnings per share (EPS) of $2.46 on revenue of $28.82 billion — missing analyst estimates of $2.59 per share and $28.94 billion respectively. This marks the continuation of a trend started by social media platforms Snap and Twitter in their earnings, where challenges to the overall advertising landscape as a result of Apple’s infamous iOS privacy update last year still weigh heavy on the industry.
The rise of TikTok has also caused problems for Meta, with the Chinese platform actively eating into Instagram’s market share.
CEO Mark Zuckerberg stated that the company will be forced to reduce employee numbers over the next year. “This is a period that demands more intensity and I expect us to get more done with fewer resources,” he explained when quizzed about the impending cuts.
With Meta now down 50% year-to-date, a sub-par earnings call was the last thing investors wanted to hear. However, the company will be hoping its early designs on the burgeoning metaverse market will eventually pay dividends, as it continues to pump money into the space in an attempt to become the out-and-out leader.
Etsy Shares Pop on Strong Earnings 🛍
Shares of Etsy (ETSY) are up 8% in premarket trading after the company posted strong results on the top and bottom line.
The company brought in $585 million for the quarter, $30 million more than analysts expected. Earnings per share came in at 51 cents, when 31 cents was expected.
The company’s CFO attributed the gains to strength in their newly acquired Depop, as well as their Etsy Ad product.
“Our second quarter results once again reflect that Etsy has maintained most of our pandemic gains, and that we are able to deliver strong bottom line performance while simultaneously investing in key initiatives,” Etsy CEO Josh Silverman said.
The company also announced it had added six million new buyers — shaking off concerns of a post-pandemic slump.
Guidance for the coming quarter was a little light, with revenue expected to be between $540 and $575 million. Analysts had expected $569 million. However, the news was a welcome boost in a time when technology and e-commerce stocks are plunging on weak results.
"We see multiple scenarios possible for the remainder of 2022, but all still point to very healthy profitability throughout,” Silverman said.
Etsy has managed to swerve the fate of many e-commerce businesses that have seen demand drop substantially in a post-COVID environment. Shares of the e-commerce player are down about 67% from highs set in November last year.