American Well, the Healthcare sector company, was revisited by a Wall Street analyst yesterday. Analyst Charles Rhyee from TD Cowen maintained a Hold rating on the stock and has a $10.00 price target.
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Charles Rhyee has given his Hold rating due to a combination of factors impacting American Well’s financial outlook. The company exceeded expectations in revenue and adjusted EBITDA, largely driven by performance payments from the DHA contract. However, the extension of this contract came with a reduced scope, excluding behavioral health and automated care, which poses a challenge to future revenue growth.
Despite management’s confidence in achieving cash flow breakeven by 2026, the reduced scope of the DHA contract could necessitate further operational expense reductions. The company’s revenue guidance for 2025 was revised downward, reflecting the impact of the contract’s limitations. While subscription revenue showed significant growth, a substantial portion is non-recurring, adding uncertainty to future financial performance. These factors contribute to the Hold rating, as they indicate both opportunities and challenges for American Well moving forward.
In another report released on July 31, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $7.50 price target.