A big day hit for healthcare stock Lifestance Health Group (LFST), as a new report out from UBS analysts suggested a big potential upside ahead for the stock. That got a lot of attention out of investors, who decided to commit cash, and plenty of it, sending Lifestance shares up over 7% in Tuesday afternoon’s trading.
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The word from analyst Kevin Caliendo—who has a four-star rating on TipRanks—upgraded Lifestance from a Neutral to a Buy, and kept its $8.50 per share price target on the stock. This suggests a potential upside of over 54% against closing prices on Friday ahead of the holiday weekend. Basically, Caliendo notes, investors may be looking a bit too hard at the conservative earnings guidance put out, both for the current quarter and the full-year.
With the federal government no longer enforcing the mental health parity rule, that could also be seen as a potential source of concern about the stock. But Caliendo believes this is being weighed too heavily against Lifestance’s potential, calling attention instead to the “…refreshed management team…” as well as a “…clear path to medium-term targets.”A rising clinician count with a “100% organic recruiting model” is reducing burnout rates and keeping more staffers in place longer.
Speaking of Recruiting….
And that recruiting model is doing Lifestance some good, reports note, as it brought in a new chief technology officer. Pablo Pantaleon is being replaced with Vaughn Paunovich starting June 9. What is particularly odd about this move is that this is the second big C-suite move that Lifestance has made this year alone. Back in February, it named a new CEO, and now, it has a new CTO on top of that.
But Paunovich has no shortage of qualifications. He was the executive vice president for enterprise platforms at Amwell, and was with UnitedHealth Group (UMH) for over a decade in a variety of different positions. That may not be the flex it once was, given its recent history, however.
Is Lifestance a Good Stock to Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on LFST stock based on five Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 4.52% loss in its share price over the past year, the average LFST price target of $9.205 per share implies 56.2% upside potential.
