AMWL Stock Forecast & Price Target

American Well Corp. has demonstrated a positive trajectory with an average revenue per visit of $77, reflecting a notable shift towards higher-margin specialty care services. The company’s total revenue has increased by 0.5% year-over-year, primarily fueled by a substantial 35.2% year-over-year growth in subscription revenue amounting to $36.9 million. Additionally, improved operating leverage is indicated by gross margins expanding by 1,470 basis points year-over-year to 48.4%, further reinforcing the company’s solid financial foundation as it anticipates significant growth in software-related revenue.

American Well Corp has provided FY25 revenue guidance of $250 million to $260 million, which is significantly below the consensus expectation of $312.3 million and indicates minimal growth, highlighting challenges due to customer churn and the APC divestiture. Furthermore, revenue from visit fees and other services has declined year-over-year by 9.0% and 56.5%, respectively, and these figures fell short of prior estimates, pointing to a broader trend of declining demand for its offerings. Additionally, operational expenses exceeded expectations, driven by higher G&A costs related to one-time bad debt expenses, which, combined with lower visit volumes, raises concerns about the company's financial stability and long-term revenue growth potential amidst increasing competition.