DarioHealth stock price target lowered to $1.25 at Stifel on revenue miss

Investing.com - Stifel has lowered its price target on DarioHealth Corp. (NASDAQ:DRIO) to $1.25 from $1.50 while maintaining a Buy rating, following the company’s second-quarter results that fell short of expectations. The stock, currently trading at $0.43, has declined nearly 19% in the past week and 45% year-to-date, according to InvestingPro data.

The digital health company reported second-quarter revenue and EBITDA loss below consensus estimates, with no forward guidance provided. The underperformance reflected a previously known client departure, lost revenue from a strategic partner, and slower-than-expected ramps of new contracts. InvestingPro analysis shows the company’s EBITDA stands at -$35.26 million, with analysts not anticipating profitability this year. Get access to 10+ additional ProTips and comprehensive financial analysis with an InvestingPro subscription.

DarioHealth has signed $5 million in annual recurring revenue (ARR) year-to-date, including a national health plan, and has identified an additional $5 million of high-visibility ARR in its pipeline. Despite these positive developments, Stifel reduced its 2025 and 2026 revenue and EBITDA estimates. The company maintains a strong gross profit margin of 69.5%, though InvestingPro’s Fair Value analysis suggests the stock is currently undervalued.

Management has reduced expenses by 7-8% quarter-over-quarter and over 30% year-over-year, with further cost reductions expected into 2026. These expense reductions should partially offset the impact of lower revenue projections.

Stifel’s revised projections assume DarioHealth has sufficient cash to fund operations through 2025 without accessing its credit line of approximately $17.5 million, which comes with restrictions. The firm noted that scaling the business remains challenging in competitive end-markets, though efforts to add new services help differentiate the company’s offering.

In other recent news, DarioHealth Corp reported its second-quarter 2025 earnings with a notable earnings per share (EPS) beat, though revenue did not meet expectations. The company announced an EPS of $0.18, significantly surpassing the forecasted -$0.20. However, revenue was reported at $5.37 million, falling short of the anticipated $7.12 million. This revenue miss has raised concerns among investors, despite the positive EPS result. Analyst firms have not yet updated their ratings following these results. These developments are part of the latest updates concerning DarioHealth Corp.

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