Teladoc Health, Inc. (TDOC Quick QuoteTDOC - Free Report) is set to sustain its earnings beat streak for third-quarter 2022, the results of which are scheduled to be released on Oct 26, after the closing bell.

In the last reported quarter, the virtual healthcare services provider’s adjusted loss per share of 44 cents was narrower than the Zacks Consensus Estimate of a loss of 71 cents, primarily due to increased visits and memberships as well as higher utilization. Solid contribution from access and visit fees benefited the results. The positives were partially offset by higher expenses due to massive impairment charges.

Let’s see how things have shaped up prior to the third-quarter earnings announcement.

Trend in Estimate Revision

The Zacks Consensus Estimate of a loss of 59 cents for third-quarter earnings per share has witnessed no upward revision and one downward movement in the past month. The estimate is indicative of an 11.3% deterioration from the year-ago quarter’s reported figure. Our estimate suggests a loss of 61 cents per share for the third quarter.

The Zacks Consensus Estimate for third-quarter revenues is pegged at $609.1 million, suggesting a jump of 16.8% from the year-ago quarter’s reported figure. We expect third-quarter revenues to witness a 16.5% increase from the year-ago quarter’s reading.

Teladoc Health beat on earnings in each of the trailing four quarters, the average being 41.3%. This is depicted in the graph below.

What the Quantitative Model Suggests

Our proven model predicts an earnings beat for Teladoc Health this time around as well. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is precisely the case here.

Earnings ESP: Teladoc Health has anEarnings ESP of +6.35%. The Most Accurate Estimate is currently pegged at a loss of 55 cents per share, wider than the Zacks Consensus Estimate of a loss of 59 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank:Teladoc Health currently has a Zacks Rank #3.

Factors Impacting Q3 Results

Teladoc Health’s third-quarter revenues are likely to have gained from higher Access Fees. Multiple acquisitions are expected to have generated higher subscription access fees and growth in direct-to-consumer mental health, sold on a subscription basis.

The Zacks Consensus Estimate for subscription Access Fees Revenues is pegged at $533 million, indicating an increase from the year-ago period’s $452 million. Our estimate suggests Access Fees Revenues of $529.8 million for the quarter under review, indicating an 18% increase from the prior-year quarter’s tally.

Both the Zacks Consensus Estimate and our estimate for Visit Fee revenues are pegged at $70 million for the third quarter, implying an 11.9% rise from the year-ago period’s respective reported figures.

For third-quarter 2022, the Zacks Consensus Estimate for the total visits is pegged at 4,936.3 thousand, while our estimate stands at 4,968 thousand. The estimates for visits indicate a rise from the second quarter’s 4,659 thousand. This potential increase might have supported the bottom line and poised TDOC well for an earnings beat.

The Zacks Consensus Estimate for total U.S. paid memberships is pegged at 56 million for the third quarter, suggesting a rise from 52.5 million a year ago, while our estimate stands at 55.6 million.

However, total expenses are expected to have escalated in the quarter, primarily due to higher advertising and marketing, technology and development costs. Further, the cost of goods sold, plus general and administrative expenses are likely to have increased in the third quarter, causing a deterioration in profit levels from the year-earlier quarter’s actuals. Our estimate suggests that total expenses for the third quarter might have risen 20.5% from the prior-year quarter’s reported figure to $701.7 million.

Previously, at the second-quarter earnings release, management had stated that it expects total revenues of $600-$620 million and an adjusted EBITDA within $35-$45 million for third-quarter 2022. Total visits were projected between 4.8 million and 5 million. Net loss per share was expected within 60-85 cents. The total U.S. paid membership was expected within 55.5-56.5 million.

Other Stocks That Warrant a Look

Here are some other companies worth considering from the broader medical space, as our model shows that these too have the right combination of elements to beat on earnings this time around:

Humana Inc. (HUM Quick QuoteHUM - Free Report) has an Earnings ESP of +1.12% and is a Zacks #1 Ranked player. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Humana’s earnings per share for the to-be-reported quarter implies a 29.2% improvement from the year-ago period’s reported figure. HUM has witnessed one upward estimate revision in the past 30 days against none in the opposite direction.

Pediatrix Medical Group, Inc. (MD Quick QuoteMD - Free Report) has an Earnings ESP of +1.89% and a Zacks Rank of 3.

The Zacks Consensus Estimate for Pediatrix Medical’s bottom line for the to-be-reported quarter indicates a 15.2% improvement from the year-ago period’s actuals. MD beat on earnings in three of the last four quarters and met on the same once, the average surprise being 12.5%.

10x Genomics, Inc. (TXG Quick QuoteTXG - Free Report) has an Earnings ESP of +3.51% and is a Zacks #3 Ranked player.

The Zacks Consensus Estimate for 10x Genomics’ bottom line for the to-be-reported quarter has been stable over the past week. TXG’s third-quarter revenues are pegged at $129 million, indicating a 3% increase from the prior-year quarter’s tally.

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