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Ontrak (OTRKQ)
OTHER OTC:OTRKQ
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Ontrak
(OTC:OTRKQ)
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Rating:39Underperform
Price Target:
$0.00
▼(-100.00% Downside)
Ontrak's overall stock score is heavily impacted by its poor financial performance, characterized by declining revenues, negative profitability, and high leverage. Technical analysis further indicates a bearish trend, with the stock trading below key moving averages. Valuation metrics are unfavorable due to a negative P/E ratio and lack of dividend yield. These factors collectively suggest significant risks and challenges for the company.
Positive Factors
Strategic Partnerships
Strategic partnerships with health insurers expand Ontrak's market reach and service offerings, potentially driving long-term revenue growth and enhancing competitive positioning in the healthcare technology sector.
AI and Data Analytics
Ontrak's use of AI and data analytics for personalized care management strengthens its business model, offering a competitive advantage in delivering effective healthcare solutions and improving patient outcomes.
Behavioral Health Focus
Focusing on behavioral health positions Ontrak in a growing market segment, as demand for mental health services increases, potentially leading to sustained revenue opportunities.
Negative Factors
Declining Revenue
Declining revenue indicates potential market challenges and operational inefficiencies, which could hinder growth and profitability if not addressed through strategic adjustments.
High Leverage
High leverage poses financial risks, limiting flexibility and increasing vulnerability to economic downturns, which may impact long-term financial stability and operational capacity.
Negative Cash Flow
Negative cash flow indicates ongoing cash burn and potential liquidity issues, challenging Ontrak's ability to finance operations and invest in growth initiatives sustainably.
Ontrak (OTRKQ) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$708.00
Dividend YieldN/A
Average Volume (3M)103.21K
Price to Earnings (P/E)―
Beta (1Y)1.20
Revenue Growth-21.03%
EPS Growth47.41%
CountryUS
Employees104
SectorHealthcare
Sector Strength45
IndustryMedical - Healthcare Information Services
Share Statistics
EPS (TTM)N/A
Shares Outstanding7,084,537
10 Day Avg. Volume63,585
30 Day Avg. Volume103,209
Financial Highlights & Ratios
PEG Ratio0.04
Price to Book (P/B)0.84
Price to Sales (P/S)0.77
P/FCF Ratio-0.61
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusModerate Sell
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Ontrak Business Overview & Revenue Model
Company DescriptionOntrak, Inc. is a healthcare technology company focused on providing innovative solutions to improve health outcomes for individuals with behavioral health conditions. The company operates primarily in the healthcare sector and offers personalized care management services through its proprietary technology platform. Ontrak's core products include data-driven interventions and support programs designed to engage members and facilitate access to necessary healthcare services, particularly for those suffering from mental health and substance use disorders.
How the Company Makes MoneyOntrak generates revenue primarily through contracts with health plans and employers, where it provides its behavioral health intervention programs. The company's revenue model is based on a fee-for-service structure, often incorporating performance-based incentives that align Ontrak's success with improved health outcomes for its clients. Key revenue streams include monthly service fees for each member enrolled in their programs, as well as potential bonuses for achieving specific health metrics. Additionally, Ontrak may benefit from partnerships with insurance providers and healthcare organizations that seek to enhance their behavioral health offerings, thereby expanding its market reach and driving revenue growth.
Ontrak Earnings Call Summary
Earnings Call Date:May 20, 2025
(Q1-2025)
| % Change Since: |
Next Earnings Date:Mar 12, 2026
Earnings Call Sentiment Neutral
The earnings call reflects a mixed sentiment with significant operational improvements and growth in membership contrasted by a notable decline in revenue and gross margin due to customer loss. While there are promising new business opportunities, the financial challenges remain a concern.Q1-2025 Updates
Positive Updates
Expansion of Outreach Pool
Ontrak's outreach pool has expanded significantly over the past year with new customer implementations, including Intermountain Health and a Northeast regional plan.
Doubling of Enrolled Members
Ontrak reached a milestone with over 3,165 total enrolled members by the end of Q1 2025, nearly doubling year-over-year.
Operational Improvements
The company is operating with less than half the employees it had in Q4 2021 due to significant operational efficiencies and technology advancements.
New Revenue Opportunities
Ontrak is working on a significant revenue opportunity with a large Midwestern Medicaid plan and has several other proposals in the pipeline.
AI-Driven System Success
Ontrak's AI-driven advanced engagement system has improved care team productivity and driven meaningful outcomes, enhancing the company's service delivery.
Negative Updates
Revenue Decline
Q1 2025 revenue was $2 million, reflecting a 25% decrease compared to the same period last year due to the loss of a major customer.
Decreased Revenue Per Member
Average revenue per health plan enrolled member per month decreased from $500 in Q4 2024 to $254 in Q1 2025, primarily due to a shift towards the lower-paying Engage program.
Gross Margin Decline
Q1 2025 gross margin decreased to 37% from 61% in Q4 2024, largely due to the lost customer and a shift in the mix of members.
Cash Flow Challenges
Cash flow from operations was negative $2.7 million, and the company borrowed funds to maintain cash reserves, indicating ongoing financial strain.
Company Guidance
During the Ontrak Health First Quarter 2025 Earnings Conference Call, the company provided optimistic guidance regarding its future prospects. Ontrak anticipates doubling its run rate revenue in 2025 compared to 2024, driven by successful conversions of new customer opportunities, notably with a large Midwestern Medicaid plan. The company reported a significant increase in enrolled members, reaching 3,165 by the end of Q1, which nearly doubled year-over-year. The quarter's revenue was $2 million, reflecting a 25% decrease from the previous year, attributed to the loss of a customer at the end of 2024. However, the company expects Q2 2025 revenues to range from $2.2 million to $2.6 million, representing an 8% to 22% sequential increase. Ontrak's strategic investments in AI-driven technology and expanded solution offerings, including the Engage program, have significantly improved productivity and market reach, with the potential to address critical gaps in the behavioral health care landscape. The company also highlighted its strong pipeline of prospective contracts that could bring an additional $15 million in revenue, potentially doubling its current customer-based revenue.Ontrak Financial Statement Overview
Summary
Ontrak faces significant financial challenges with declining revenues, negative profitability, and high leverage. The company's financial statements suggest a need for strategic adjustments to improve operational efficiency and stabilize its financial position. There are evident risks related to cash flow and debt management, with a pressing need to address profitability issues for long-term sustainability.Income Statement
Ontrak's income statement shows significant challenges with declining revenue and negative margins. The company has experienced a substantial decrease in revenue from previous years, with a negative revenue growth rate. Gross profit margin is moderately positive, but the net profit margin is deeply negative, indicating a struggle to achieve profitability. EBIT and EBITDA margins are also negative, highlighting ongoing operational inefficiencies.30
Negative
Balance Sheet
The balance sheet reflects a mixed financial position with high leverage and minimal equity. The debt-to-equity ratio is concerning, indicating potential risks associated with high leverage. Stockholders' equity has decreased significantly, affecting the equity ratio negatively. The return on equity is negative, further pointing to profitability challenges. On a positive note, the company has maintained some level of cash reserves, although these have declined over time.40
Negative
Cash Flow
Ontrak's cash flow statement reveals consistent negative free cash flow and operating cash flow, indicating cash burn and potential liquidity issues. The free cash flow growth is negative, and the operating cash flow to net income ratio is unfavorable due to negative cash flow and net income. Financing activities have provided some relief, but the sustainability of such reliance is uncertain.35
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 10.18M | 10.85M | 12.74M | 14.51M | 84.13M | 82.84M |
| Gross Profit | 5.87M | 6.82M | 8.80M | 7.05M | 52.92M | 39.23M |
| EBITDA | -23.91M | -22.59M | -14.42M | -42.38M | -24.65M | -14.21M |
| Net Income | -27.92M | -25.49M | -27.92M | -51.57M | -37.14M | -22.71M |
Balance Sheet | ||||||
| Total Assets | 18.27M | 21.07M | 19.85M | 25.76M | 93.68M | 144.70M |
| Cash, Cash Equivalents and Short-Term Investments | 4.09M | 5.71M | 9.70M | 5.03M | 58.82M | 86.91M |
| Total Debt | 9.68M | 8.50M | 1.69M | 11.26M | 37.45M | 48.73M |
| Total Liabilities | 13.62M | 11.21M | 5.58M | 20.08M | 48.13M | 83.95M |
| Stockholders Equity | 4.65M | 9.87M | 14.27M | 5.68M | 45.55M | 60.75M |
Cash Flow | ||||||
| Free Cash Flow | -13.10M | -13.61M | -15.78M | -25.12M | -30.64M | -8.04M |
| Operating Cash Flow | -12.90M | -13.44M | -15.50M | -23.97M | -26.16M | -6.28M |
| Investing Cash Flow | -198.00K | -177.00K | -285.00K | -1.16M | -4.48M | -4.64M |
| Financing Cash Flow | 10.78M | 9.62M | 15.77M | -31.11M | -6.63M | 100.11M |
Ontrak Risk Analysis
Ontrak disclosed 61 risk factors in its most recent earnings report. Ontrak reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Ontrak Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
48 Neutral | $81.57M | ― | -38.35% | ― | 4.33% | 50.50% | |
47 Neutral | $1.35B | ― | -15.42% | ― | -2.37% | 77.85% | |
44 Neutral | $17.72M | -0.72 | ― | ― | 187.24% | 82.90% | |
42 Neutral | $396.10M | -1.05 | -47.69% | ― | -5.30% | 46.01% | |
39 Underperform | $708.00 | >-0.01 | ― | ― | -21.03% | 47.41% |
* Healthcare Sector Average
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.