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Investing.com - Goldman Sachs has raised its price target on Omada Health Inc (NASDAQ:OMDA) to $31.00 from $29.00 while maintaining a Buy rating following the company’s strong second-quarter results. The digital health company, currently valued at $1.1 billion, has shown strong momentum with an impressive 12% return over the past week, according to InvestingPro data.
The digital health company reported second-quarter revenue of $61.4 million, representing 48.9% year-over-year growth and exceeding both Goldman Sachs estimates of $56.1 million and consensus expectations of $55.3 million. The revenue outperformance was attributed to stronger member growth combined with higher implied pricing, with the company maintaining a healthy gross margin of 62%.
Omada Health achieved adjusted EBITDA margins of -0.3%, significantly better than Goldman Sachs’ estimate of -7.9%, with the improvement driven by higher revenue and gross margins that boosted overall financial performance.
Goldman Sachs noted that Omada Health remains well-positioned to generate differentiated top-line growth with improving margins, supported by a strong cash position that enables growth-oriented investments. The firm expects OMDA shares to move toward a peer group multiple of approximately 6x next twelve months sales versus the stock’s current multiple of 4.2x.
Since its IPO pricing at $19 per share, Omada Health stock has traded in a wide range between $14.14 and $28.40, which Goldman Sachs attributes to investor debate about growth prospects and broader volatility among small and mid-cap stocks. For deeper insights into Omada Health’s valuation and growth potential, InvestingPro subscribers can access additional exclusive financial metrics and analysis tools.
In other recent news, Omada Health’s second-quarter results surpassed both Freedom Broker’s and consensus estimates, prompting the firm to lower its price target from $26 to $20 while maintaining a Buy rating. This adjustment follows the company’s initial public offering on June 6, where it raised $150 million. Freedom Broker had initially set a price target of $26, indicating a significant potential upside. Needham also initiated coverage with a Buy rating and a $23 price target, highlighting Omada’s virtual-first care platform’s strength in managing chronic conditions. Evercore ISI, meanwhile, gave an Outperform rating with a $21 price target, emphasizing the company’s human-led, technology-enabled platform serving over 679,000 members. Barclays (LON:BARC) joined the coverage with an Overweight rating and a $21 price target, citing the potential of Omada’s GLP-1 Care Track offerings to accelerate market adoption. These recent developments reflect a strong interest from multiple analyst firms in Omada Health’s market potential.
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