Needham analyst Ryan MacDonald has reiterated their neutral stance on AMWL stock, giving a Hold rating today.
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Ryan MacDonald has given his Hold rating due to a combination of factors surrounding American Well’s recent developments. The company has experienced a revision in its topline guidance following the extension of its contract with the Defense Health Agency (DHA) through 2026. Although the second-quarter results surpassed expectations, the contract extension only covers the virtual care aspect, excluding automated care and behavioral health components due to budget limitations.
As a result, the forecast for fiscal year 2025 has been adjusted downward, as the previous outlook anticipated revenue growth in the second half of 2025 from the DHA renewal. With the extension finalized, the immediate potential for significant upside is diminished. While management is expected to have a clearer view of the fiscal year 2025 outcomes, the stock is likely to remain stable until there is more certainty regarding topline growth.
Based on the recent corporate insider activity of 45 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of AMWL in relation to earlier this year.