AMWL Stock Forecast & Price Target

American Well Corp has demonstrated promising growth, with an average revenue per visit increasing year-over-year to $77, suggesting a positive shift towards higher-value specialty care services. The company's total revenue rose by 0.5% year-over-year, strongly supported by a substantial 35.2% growth in subscription revenue, which reached $36.9 million. Additionally, the company achieved improved operating leverage as gross margins expanded by 1,470 basis points year-over-year to 48.4%, indicating enhanced efficiency and profitability potential moving forward.

American Well Corp's initial FY25 revenue guidance of $250 million to $260 million is notably below market expectations of $312.3 million, reflecting only marginal growth and being adversely impacted by customer churn and the divestiture of its APC division. Both visit fee revenue and other revenue saw significant year-over-year declines of 9.0% and 56.5%, respectively, further exacerbated by expectations for lower visit volumes in FY25 compared to FY24. Additionally, despite a decrease in operating expenses, these costs exceeded estimates due to unexpected one-time expenses, and the company's long-term visibility is compromised by competitive pressures and uncertainty regarding the financial impact of its Converge initiative.