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Tuesday saw KeyBanc Capital Markets reaffirm its Overweight rating on LifeMD Inc (NASDAQ:LFMD) stock, maintaining a price target of $7.50. The investment firm’s confidence in the telehealth provider is buoyed by a robust performance in both revenue and earnings before interest, taxes, depreciation, and amortization (EBITDA), which surpassed expectations. LifeMD’s telehealth revenue exceeded consensus estimates by approximately 15%, while its consolidated adjusted EBITDA was about 35% higher than the consensus. According to InvestingPro analysis, the company appears undervalued at its current market cap of $185 million, with analysts setting targets ranging from $7 to $16 per share.
The company’s forward-looking guidance also suggests a positive trajectory, with telehealth revenue projections for the fiscal year 2025 (FY25) being roughly 5% higher than consensus and consolidated adjusted EBITDA guidance exceeding consensus by approximately 11.5%. This optimism is supported by LifeMD’s impressive track record, with InvestingPro data showing a strong revenue growth of 42% in the last twelve months and industry-leading gross profit margins of 90%. KeyBanc anticipates a revenue increase of around 31% in FY25, driven by multiple factors. These include an expected 15-20% growth in LifeMD’s RexMD business, a modest increase from its weight loss management segment, and contributions from the adoption of private and governmental insurance coverage.
Additionally, KeyBanc sees potential for significant growth in LifeMD’s weight management program, especially with the anticipated launch of Medicare coverage on April 1. This optimism is underpinned by the possibility of Medicare expanding its coverage to include GLP-1s for obesity treatment, beyond the current co-morbidities. The $7.50 price target set by KeyBanc is based on an estimated 1.5 times multiple of their FY25 revenue forecast for LifeMD.
The analyst’s commentary highlights the company’s strong performance and positive outlook, suggesting that LifeMD is well-positioned for continued growth in the telehealth sector. The firm’s analysis underscores the multiple sources of revenue that could contribute to LifeMD’s expansion in the coming fiscal year.
In other recent news, LifeMD Inc reported a strong financial performance for the fourth quarter of 2024, surpassing market expectations. The company achieved an earnings per share (EPS) of $0.21, compared to a forecasted loss of $0.05, and its revenue reached $64.3 million, exceeding the anticipated $57.66 million. LifeMD’s telehealth segment showed significant growth, with revenue increasing by 60% year-over-year. The company’s full-year 2024 revenue totaled $212.5 million, representing a 39% growth from the previous year. Looking ahead, LifeMD has set ambitious targets for 2025, projecting consolidated revenue between $265 million and $275 million. Additionally, the company aims for adjusted EBITDA in the range of $30 million to $32 million. Analyst firms like BTIG and KeyBanc have shown interest in LifeMD’s strategic plans, particularly in expanding its telehealth and insurance offerings. Furthermore, LifeMD is planning to launch new services, including behavioral health and a women’s health initiative, as part of its growth strategy.
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