$TDOC with ANOTHER giant goodwill impairment
This quarter it's $19 net loss per share or a $3 billion impairment charge for Livongo. What the actual fuck is this company at this point.
Steve Matt's avatar
And they still have $4.8B in goodwill on their balance sheet lol
Neil's avatar
At this point.. are we even surprised? They overpaid for Livongo.

But this Q is better than the last one. Gross margin and adj gross margin % are up again (thank fuck)
Stock Metal Investment's avatar
@couch_investor Yeah, still incredible that this wasn't in the EPS expectations. They should communicate this better....but yeah, not as much of a train wreck as last quarter, some numbers moving in the right direction at least.
Pat Connolly's avatar
Do we have any idea how sticky their current user base is? I imagine it's pretty difficult to get doctors onto the platform so how can we value this? ( unless doctors double dip by being on all platforms as a way to maximize their client base)
Joshua Simka's avatar
@pat_connolly If you look on Reddit there are some interesting threads where doctors discuss telemedicine opportunities. Seems a lot of doctors are doing this part time and there's a general sentiment I've picked up on that consistent telework is quite boring (basically writing out scripts for antibiotics all day) and that it's too easy for skills to start slipping working with such a limited scope.
Pat Connolly's avatar
@tomato that makes alot of sense actually — I bet other doctors would be like oh “you just do telemedicine”
Dissecting the Markets's avatar
They bought Livongo in late 2020 when valuations were very high and everyone was euphoric despite how bad those times were. This could be a sign that more of the acquisition deals that companies have made during those times will come with impairments as well.
Stock Metal Investment's avatar
@dissectmarkets Looking at $SQ with the Afterpay acquisition as a likely candidate maybe? Would've said $CRM Slack, but that keeps posting great growth numbers.
Reasonable Yield's avatar
A very simple balance sheet tactic to help avoid huge impairment potential, or generally low quality balance sheets.

If intangible assets & goodwill are a considerable portion of total assets, even worse if they are increasing as a % over time, just stay the hell away.
Stock Metal Investment's avatar
@reasonableyield After the TDOC situation I started to monitor goodwill as a percentage of enterprise Value. TDOC was at like 200%, my highest value now is CRM with around 20%. That is alright, but ideally you don't want much goodwill.
Rihard Jarc's avatar
The amount of goodwill on their balance sheet is crazy. I am always skeptical of goodwill from most companies if they are not Apple or Nike.

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