Matthew Shea, an analyst from Needham, maintained the Buy rating on Oncology Institute. The associated price target remains the same with $5.00.
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Matthew Shea has given his Buy rating due to a combination of factors that highlight both near‑term execution and attractive valuation. TOI reaffirmed its fiscal 2025 outlook and introduced an initial 2026 forecast that exceeds market expectations on both revenue and EBITDA margins, signaling solid operational momentum. Despite this constructive guidance, the stock declined following the announcement, which he interprets as a short-term “sell the news” reaction rather than a reflection of fundamentals. At the current share price, TOI trades at a significant discount to its 2026 sales, even though its projected growth and profitability metrics align with a Rule-of-30 profile, suggesting the market is underestimating its potential.
Furthermore, Shea believes the market is not fully appreciating the improved economics associated with TOI’s delegated contracts, which enhance visibility and profitability. He also points to the pharmacy business as providing a natural hedge that can help mitigate volatility within the broader model. In addition, management has outlined a medium-term path toward mid-single-digit EBITDA margins by 2028, reinforcing confidence in a steady improvement in earnings power. Taken together, this outlook supports his view that TOI’s financial profile merits a higher valuation multiple, justifying a Buy recommendation on current weakness.