American Well: Hold Rating Amidst Revenue Challenges and Strategic Progress

Needham analyst Ryan MacDonald has reiterated their neutral stance on AMWL stock, giving a Hold rating today.

Ryan MacDonald has given his Hold rating due to a combination of factors that indicate a cautious approach towards American Well’s stock. Despite the company’s adherence to its fiscal guidance for the years 2024 to 2026, his position takes into account the softer quarterly results which were influenced by significant payor migrations, adversely affecting subscription and visit revenue. Moreover, an outage at Change Healthcare further contributed to the weakened visitation numbers, casting a shadow on the immediate performance of the company.
Nonetheless, MacDonald acknowledges the strategic milestones American Well has achieved, including the completion of a behavioral health rollout at initial sites and the ongoing deployment of its Converge platform. These developments are perceived as positive steps toward a larger enterprise-wide deployment slated for the fourth quarter, with expectations of a material increase in revenue by the fiscal year 2025. MacDonald’s outlook is tempered with caution, as he prefers to wait for additional signs of effective execution on the company’s part before reconsidering the stock’s rating, seeking to reduce the risk associated with the enterprise’s expansion.

MacDonald covers the Technology sector, focusing on stocks such as Model N, Chegg, and Instructure Holdings. According to TipRanks, MacDonald has an average return of 7.6% and a 47.23% success rate on recommended stocks.

In another report released today, Morgan Stanley also maintained a Hold rating on the stock with a $1.00 price target.

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American Well (AMWL) Company Description:

American Well Corp is a telehealth company enabling digital delivery of care for its customers. Its platform, Amwell, enables care delivery across the full healthcare continuum – from primary and urgent care in the home to high acuity specialty consults, such as telestroke and telepsychiatry, in the hospital. It provides both on-demand and scheduled consultations.