On Thursday, TD Cowen adjusted its outlook for American Well Corp. (NYSE:AMWL) shares, increasing the price target significantly to $12.00, up from the previous $2.00, while maintaining a Hold rating on the stock. The firm's decision came after American Well reported second-quarter 2024 revenue and adjusted EBITDA that surpassed consensus estimates.
The company's revenue for the quarter was $63 million with an adjusted EBITDA loss of $35 million, which was more favorable than the consensus projections of $62 million in revenue and a $40 million adjusted EBITDA loss.
The company has also confirmed its revenue outlook for 2024 and long-term targets, while improving its adjusted EBITDA forecast by $10 million, attributing the positive adjustment to effective cost management strategies.
According to the analyst's comments, American Well has received positive initial feedback from the Defense Health Agency (DHA), and the deployment of its services remains on schedule.
Furthermore, American Well has announced a series of expansions and renewals, indicating customer satisfaction with its Converge platform. The analyst's commentary highlighted these developments as signs of the company's solid performance, although there is an anticipation for new customer acquisitions in future quarters.
The price target increase reflects the analyst's recognition of American Well's recent financial performance and the company's ability to manage costs while continuing to grow its business.
The maintained Hold rating suggests that while the analyst acknowledges improvements, they remain cautious and look forward to additional evidence of sustained growth and customer acquisition.
In other recent news, American Well Corp has reported its second-quarter 2024 revenue of $63 million, surpassing consensus estimates. In addition, the company's adjusted EBITDA loss of $35 million was more favorable than the projected $40 million loss.
American Well Corp also confirmed its revenue outlook for 2024 and improved its adjusted EBITDA forecast by $10 million. TD Cowen has responded by increasing the price target for the company to $12.00 from the previous $2.00, while maintaining a Hold rating on the stock.
The company has also announced a series of expansions and renewals, indicating customer satisfaction with its Converge platform. Furthermore, American Well Corp recently underwent a 1-for-20 reverse stock split, affecting its Class A, B, and C common stock.
Lastly, leadership changes have taken place with Co-founder Roy Schoenberg transitioning to become the Executive Vice Chairman of the company's Board of Directors, with Ido Schoenberg assuming the role of sole Chief Executive Officer. These are recent developments within the company.
InvestingPro Insights
Following TD Cowen's updated outlook on American Well Corp. (NYSE:AMWL), current InvestingPro data and insights offer additional context to the company's financial health and market performance. With a market capitalization of approximately $154.94 million and a notably low price-to-book ratio of 0.29 as of Q1 2024, American Well appears to be valued conservatively relative to its book value. Despite a revenue decline of 8.08% over the last twelve months as of Q1 2024, the company holds a strong gross profit margin of 34.52%, suggesting efficiency in its core operations.
An InvestingPro Tip highlights that American Well currently holds more cash than debt on its balance sheet, which is a positive indicator of financial stability. Furthermore, the company's liquid assets exceed its short-term obligations, providing a cushion for operational flexibility. However, it is important to note that analysts do not expect the company to be profitable this year, and it has not been profitable over the last twelve months. Additionally, the stock has experienced a significant drop of 82.59% in its one-year price total return as of Q1 2024, although there has been a strong return over the last month with a 60.2% increase.
For investors seeking more comprehensive analysis, additional InvestingPro Tips related to American Well's financial metrics and stock performance are available, including insights on earnings revisions and cash burn rates. In total, there are 10 more InvestingPro Tips available, providing a deeper dive into the company's financial nuances and future outlook.
These insights can be particularly useful for investors considering TD Cowen's new price target and hold rating, as they offer a broader perspective on the company's financial standing and market trends. For those interested in exploring these metrics further, the full suite of tips and data can be accessed on InvestingPro.
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