Hold Rating Maintained for American Well Amid Revenue Growth and Contract Uncertainties

TD Cowen analyst Charles Rhyee maintained a Hold rating on American Well (AMWL – Research Report) yesterday and set a price target of $12.00.

Charles Rhyee has given his Hold rating due to a combination of factors influencing American Well’s current financial standing and future prospects. The company’s first-quarter revenue surpassed expectations, primarily due to increased visit revenues from flu-related cases and specialty programs. Additionally, American Well demonstrated effective cost management, achieving a reduction in operating expenses that slightly exceeded estimates.
Despite these positive indicators, the Hold rating reflects some uncertainties, particularly regarding the delayed renewal of the DHA contract. While the renewal is expected to occur, the timing is uncertain, as it depends on the appointment of a new permanent head of the DHA. Furthermore, although management has reiterated its 2025 guidance, the projections appear conservative given the current trajectory. These elements contribute to the cautious outlook, justifying the Hold recommendation.

Based on the recent corporate insider activity of 59 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.