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American Well Posts Smaller-Than-Feared Quarterly Loss, Revenues Miss Estimates

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American Well (AMWL) reported a smaller-than-expected loss in the first quarter. However, sales missed analysts’ expectations of $58.75 million.

The telemedicine company incurred a loss of $0.16 per share in Q1, compared to the $0.19 loss per share estimated by analysts. A loss of $0.58 per share was reported in the same quarter last year.

Revenue generated in the quarter was $57.6 million which grew 7.3% from the year-ago period.

Total active providers surged 240% year-over-year to approximately 81,000, while total visits increased 120% to 1.6 million in Q1. (See American Well stock analysis on TipRanks)

American Well Chairman Dr. Ido Schoenberg said, “Our next generation platform Converge is designed to enable healthcare’s most trusted players to carry out digitally empowered, full-spectrum, unified online and in-person care. At its core, we believe Converge offers exceptional usability, reliability, scalability and flexibility.”

Schoenberg further added, “With its modular open architecture and longitudinal capabilities, we believe Converge will simplify innovative collaboration across the ecosystem. We expect Converge to expand our market opportunity and enhance our own efficiencies over time.”

For 2021, the company expects revenues to come in the range of $260-270 million. The consensus estimate is pegged at $266.21 million.

On April 15, Needham analyst Ryan MacDonald reiterated a Buy rating on American Well.

MacDonald commented, “While Amwell is priced at a discount to its digital health peers, we cannot justify enough upside to warrant a Buy rating until the mix of growth begins to shift towards less volatile, higher margin subscription revenue.”

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 3 Buys versus 5 Holds. The average analyst price target of $27.75 implies 116.5% upside potential to current levels. Shares have increased 46.1% over the past six months.

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