On Friday, Truist Securities revised its price target on shares of Accolade Inc. (NASDAQ:ACCD), lowering it to $9.00 from the previous $14.00, while keeping a Buy rating on the stock. The adjustment followed a post-quarterly call with Accolade's management, during which a range of topics were discussed, including the company's first-quarter results for the fiscal year 2025, updated expectations for the full year, and general discussions on GLP-1s.
During the call, the Truist analyst engaged in a question-and-answer session with Accolade's management to gain insights into the company's performance and outlook. While the responses from the company were not provided verbatim, they were contextualized to reflect the back-and-forth nature of the conversation.
The analyst's decision to maintain the Buy rating indicates a continued positive outlook on Accolade's stock, despite the reduced price target. The new target of $9.00 represents a significant decrease from the previous target but suggests that the analyst still sees potential value in the company's shares.
Accolade, which is publicly traded on the NASDAQ, has been under scrutiny by investors following its recent financial disclosures. The dialogue with management aimed to clarify the company's position and future plans, which are critical for investors to understand the basis for the analyst's rating and price target adjustments.
The report from Truist Securities reflects the latest available information following the conversation with Accolade's management.
In other recent news, Accolade Inc. reported a year-over-year revenue growth of 18% for the first quarter of fiscal year 2025, totaling $110.5 million. The company revised its full-year revenue outlook for 2025 to between $460 million and $475 million, indicating an 11% to 15% growth year-over-year. Despite this, DA Davidson has revised its price target for Accolade shares to $5.00, down from the previous target of $10.00, while maintaining a Neutral rating on the stock.
This adjustment follows Accolade's recent decision to apply more stringent criteria to marketing investments, which resulted in a 5% reduction in expected revenue for fiscal year 2025. However, the company's EBITDA outlook for FY25 remains positive, ranging from $15 million to $20 million.
Additionally, Accolade's long-term revenue goal of $1 billion has been postponed by approximately one year. The company maintains a strong customer base of over 1,200 and 14 million members, demonstrating its commitment to financial stability.
InvestingPro Insights
As Accolade Inc. navigates through its fiscal year 2025, the latest data from InvestingPro offers a deeper insight into the company's financial health and market performance. With a market capitalization of $511.25 million, Accolade is currently operating with a negative P/E ratio of -4.77, which aligns with analysts' expectations that the company will not be profitable this year. Despite these challenges, Accolade's revenue has grown by 14.09% over the last twelve months as of Q4 2024, indicating some positive momentum in its business operations.
InvestingPro Tips suggest that Accolade's stock price has experienced significant volatility, with a notable decline of 39.03% over the last three months. Additionally, the company's liquid assets surpass its short-term obligations, which could provide some financial flexibility in the near term. However, with analysts predicting a lack of profitability and no dividend payouts, investors may need to weigh these considerations carefully.
For those interested in a deeper dive into Accolade's financial metrics and future outlook, InvestingPro provides additional tips that could guide investment decisions. By using the coupon code PRONEWS24, investors can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription to access these valuable insights. With 9 additional InvestingPro Tips available, informed decision-making is just a subscription away.
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