Lifestance Health Group (LFST) AI Stock Analysis

• Market Cap: $2.51B
• Dividend Yield: N/A
• Average Volume (3M): 1.98M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.78
• Revenue Growth: 18.50%
• EPS Growth: 69.93%
• Country: US
• Employees: 10,218
• Sector: Healthcare
• Sector Strength: 69
• Industry: Medical - Care Facilities
• EPS (TTM): -0.15
• Shares Outstanding: 384,550,140
• 10 Day Avg. Volume: 1,401,110
• 30 Day Avg. Volume: 1,978,959
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.11
• Price to Cash Flow (P/CF): 10.60
• P/FCF Ratio: 10.10
• Enterprise Value/Market Cap: 1.25
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 2.52
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $9.20
• Price Target Upside: 40.89% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

LifeStance Health Group's overall stock score reflects strong revenue growth and cash flow improvements but is tempered by ongoing profitability challenges and high valuation. The technical indicators suggest potential short-term bearish momentum. The positive earnings call highlights operational achievements but also acknowledges rate pressures and increased expenses. The company's strategic focus on growth and leadership changes are promising, but financial performance improvements are crucial for a higher score.

Positive Factors

Business Model

The in-network, 'clicks-and-mortar' operating model offering both virtual and in-person behavioral healthcare services is unique and well-positioned for long-term growth.

Financial Performance

LifeStance Health reported fourth quarter results, which came in above consensus expectations with sales and adjusted EBITDA beating forecasts.

Margin Expansion

Strong execution on operational initiatives increase confidence in LifeStance being able to deliver 15-20% EBITDA margins long term.

Negative Factors

Healthcare Legislation

The components in the healthcare package won't be final until the House and Senate vote on the package.

Regulatory Environment

CMS released its CY25 final rule for the physician fee schedule that called for a 2.83% decrease from the current CY24 conversion factor.

Lifestance Health Group Business Overview & Revenue Model

Company Description

LifeStance Health Group, Inc., through its subsidiaries, provides outpatient mental health services. The company offers patients a suite of mental health services, including psychiatric evaluations and treatment, psychological, and neuropsychological testing, as well as individual, family, and group therapy. It treats a range of mental health conditions, including anxiety, depression, bipolar disorder, eating disorders, psychotic disorders, and post-traumatic stress disorder. In addition, the company operates outpatient mental health platform as well as offers patients care virtually through its online delivery platform or in-person at its centers in 32 states. It serves children, adolescents, adults, and geriatrics. LifeStance Health Group, Inc. was founded in 2017 and is based in Scottsdale, Arizona.

How the Company Makes Money

LifeStance Health Group generates revenue primarily through providing mental health services to patients. The company's revenue model is based on a fee-for-service arrangement, where they charge patients or their insurance providers for each session or service rendered. Key revenue streams include therapy sessions, psychiatric evaluations, medication management, and other mental health services offered by their network of clinicians. LifeStance Health also benefits from significant partnerships with insurance providers, which facilitate access to a broader patient base by ensuring that services are covered under various health insurance plans. Additionally, the company's expansion into telehealth services has opened up new revenue opportunities by allowing them to reach patients beyond geographical limitations, further contributing to their earnings.

Lifestance Health Group Financial Statement Overview

Summary

Lifestance Health Group demonstrates strong revenue growth and improving cash flows, but ongoing losses in net income and negative EBIT margins indicate challenges in achieving profitability. The balance sheet shows strong equity support and reduced leverage, which provides some financial stability. Continued focus on operational efficiency and cost management could help improve profitability and overall financial health.

Income Statement

The company has shown a consistent revenue growth from $212.5 million in 2019 to $1.25 billion in 2024, indicating strong market demand and expansion. However, profitability remains a concern, with negative net income and EBIT over recent years, reflecting challenges in managing costs and achieving operational efficiency. The EBIT and EBITDA margins have improved slightly but are still negative, suggesting ongoing issues with core operational performance.

Balance Sheet

The balance sheet indicates a strong equity base with stockholders' equity at $1.45 billion, showing resilience despite operational losses. The debt-to-equity ratio has improved significantly from 2020, indicating better financial management and reduced leverage. However, a high total debt of $198 million and negative net income pose risks to financial stability. The equity ratio remains robust, highlighting long-term viability.

Cash Flow

The cash flow statement shows a significant improvement in operating cash flow, turning positive in 2024, which is a positive signal for liquidity. Free cash flow has also improved to $107 million in 2024, indicating better cash management. However, historical volatility in cash flows and capital expenditures highlight the need for sustained cash generation to support growth and reduce financial risk.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.25B	1.06B	859.54M	667.51M	377.22M
	Gross Profit
1.25B	302.10M	237.02M	201.51M	134.32M
	EBIT
-31.61M	-189.13M	-210.17M	-286.35M	15.44M
	EBITDA
39.87M	-104.93M	-136.41M	-229.62M	8.77M
	Net Income Common Stockholders
-57.44M	-186.26M	-215.56M	-307.20M	-38.07M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
154.57M	78.82M	108.62M	148.03M	18.83M
	Total Assets
2.12B	2.23B	2.17B	1.93B	1.57B
	Total Debt
198.15M	511.04M	476.49M	157.42M	362.53M
	Net Debt
43.58M	432.22M	367.87M	9.39M	343.70M
	Total Liabilities
672.01M	804.28M	655.15M	382.08M	571.89M
	Stockholders Equity
1.45B	1.43B	1.52B	1.55B	997.84M
Cash Flow		Free Cash Flow
85.69M	-57.40M	-26.47M	-85.07M	-46.60M
	Operating Cash Flow
107.26M	-16.88M	52.79M	9.42M	-8.53M
	Investing Cash Flow
-21.57M	-60.34M	-139.46M	-194.08M	-861.17M
	Financing Cash Flow
-9.95M	47.43M	47.26M	313.86M	912.27M

Lifestance Health Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 6.53
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LFST, the sentiment is Negative. The current price of 6.53 is below the 20-day moving average (MA) of 6.62, below the 50-day MA of 7.07, and below the 200-day MA of 6.94, indicating a bearish trend. The MACD of -0.16 indicates Negative momentum. The RSI at 44.16 is Neutral, neither overbought nor oversold. The STOCH value of 47.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LFST.

Lifestance Health Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ASTH	71 Outperform	$1.53B	34.03	6.50%	―	46.72%	-30.24%
PNTG	69 Neutral	$887.85M	36.17	10.40%	―	27.59%	61.97%
TALK	61 Neutral	$525.52M	503.23	0.97%	―	25.02%	―
ACHC	60 Neutral	$2.04B	7.98	8.73%	―	7.69%	―
LFST	58 Neutral	$2.51B	―	-4.00%	―	18.50%	69.93%
Sector *	51 Neutral	$5.32B	3.41	-40.36%	2.89%	17.93%	2.52%
CMPS	47 Neutral	$261.87M	―	-81.56%	―	―	3.88%

Lifestance Health Group Corporate Events

LifeStance Health Group Reports Strong 2024 Financial Results

LifeStance Health Group reported its financial results for the fourth quarter and full year 2024, showing a 19% increase in revenue to $1.251 billion and a 103% growth in Adjusted EBITDA to $119.7 million. Despite a net loss of $57.4 million for the year, the company demonstrated strong operational performance with increased visit volumes and clinician growth, positioning itself for continued momentum in 2025 with projected revenues between $1.40 billion and $1.44 billion.

Lifestance Health Group Announces Leadership Changes for 2025

LifeStance Health Group announced leadership changes effective March 2025, with David Bourdon promoted to Chief Executive Officer, succeeding the retiring Kenneth Burdick, who will become Executive Chairman. Ryan McGroarty will take over as Chief Financial Officer, bringing extensive experience from his previous roles at Help at Home and Cigna. These appointments aim to maintain the company’s strong operational and financial performance, ensuring continued growth and expansion in the mental health care sector.