TD Cowen reiterated its hold rating on shares of American Well Corp. (NYSE: AMWL), maintaining a price target of $12.00. The firm's analysis highlighted the ongoing rollout of American Well's services at five initial demonstrative sites for the Defense Health Agency (DHA), which is proceeding according to plan. The full enterprise deployment of these services is anticipated in December 2024.
The company's collaboration with the DHA is seen as a significant step, with expectations of a long-term sustainment contract likely to be secured in the first quarter of 2025. TD Cowen noted the DHA's strong commitment to American Well, indicating a positive outlook for the future of this partnership.
American Well's current project with the DHA is a pivotal development for the company, marking its shift from being solely a virtual care provider to becoming a facilitator of hybrid care models. This transformation is expected to broaden the scope of services and solutions American Well offers to its clients, particularly within the healthcare sector managed by the DHA.
The hold rating reflects a cautious but steady perspective on American Well's stock, suggesting that investors maintain their current positions while the company continues to execute its strategic initiatives. The $12.00 price target is a projection of the stock's value, considering the anticipated growth and contractual developments with the DHA.
As American Well progresses with its DHA deployment, investors and market watchers are likely to closely monitor the company's performance and the impact of its transition towards enabling hybrid care models. The successful implementation and potential sustainment contract with the DHA could be pivotal milestones for American Well in the coming months.
American Well Corp has made substantial strides in its financial performance, with a reported second-quarter 2024 revenue of $63 million, exceeding consensus estimates. The company's adjusted EBITDA loss of $35 million was more favorable than the anticipated $40 million loss.
This positive financial outcome prompted TD Cowen to increase the price target for American Well to $12.00, up from the previous $2.00, while maintaining a Hold rating.
In terms of company news, American Well amended the employment agreement with Kathy Weiler, the Chief Commercial & Growth Officer, providing her with various benefits should she leave her position without a "Good Reason" on or after June 1, 2025.
The company has successfully deployed its Converge platform at five initial sites and is on track for completion and enterprise deployment in the fourth quarter of 2024. Investors and stakeholders are encouraged to look forward to February for a more detailed financial outlook from American Well.
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