Craig Hettenbach, an analyst from Morgan Stanley, maintained the Buy rating on Lifestance Health Group (LFST – Research Report). The associated price target remains the same with $10.00.
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Craig Hettenbach has given his Buy rating due to a combination of factors that highlight LifeStance Health Group’s strategic positioning and growth potential. The company is well-positioned to capitalize on the increasing demand for outpatient mental health services, driven by a shift towards in-network insurance coverage and a reduction in the social stigma associated with seeking behavioral health care. LifeStance’s hybrid care model, which combines virtual and in-person visits, enhances flexibility for both patients and clinicians, supporting this demand.
Additionally, LifeStance is focused on expanding its EBITDA margins significantly over the long term, with management confident in achieving 15%-20% margins, up from the current guidance of approximately 10% by 2025. This margin expansion is expected to be driven by slower growth in general and administrative expenses relative to revenue, improvements in center margins, and the introduction of higher-margin services. The company’s efforts to optimize staffing, real estate, and cash collection processes further bolster its financial outlook, making it an attractive investment opportunity.
In another report released yesterday, UBS also upgraded the stock to a Buy with a $8.50 price target.
Based on the recent corporate insider activity of 46 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 LFST in relation to earlier this year.