American Well Corporation Stock May Be Bottoming
2022.06.01 13:40
Telehealth software company American Well Corporation (NYSE:AMWL) stock has collapsed (-86%) from its post-IPO highs in 2021 during the pandemic recovery.
Its shares have been in a bear market since peaking out. American Well (Amwell) doesn’t provide medical services. It’s not to be confused with telehealth providers like Teladoc (NYSE:TDOC) which connects patients to its network of doctors that provide virtual medical services.
American Well provides the software platforms that are used by over 2000 hospital systems, 55 health plan partners, including UnitedHealth Group (NYSE:UNH) that over 102,000 providers used to service over 80 million members.
It’s platform and products, like telemedicine carts, enable patients to meet with their doctors remotely. The pandemic was a boon to telemedicine and Amwell was right in the middle of the tailwinds.
The reopening trend is trying to normalize healthcare, but remote tele-visits and telehealth have proven to be both convenient and cost-effective and are here to stay.
The development and implementation of its industry leading digital care delivery enablement platform “Converge” is on track.
Prudent investors seeking exposure in a pure play digital care delivery provider can consider opportunistic pullback levels to scale into a speculative position.
Q1 Fiscal 2022 Earnings Release
On May 9, 2022, Amwell released its fiscal first-quarter 2022 results for the quarter ending March 2022. The Company reported an adjusted earnings-per-share (EPS) loss of (-$0.26) excluding non-recurring items versus consensus analyst estimates for a loss of ($0.20), missing estimates by (-$0.06).
Revenues rose 11.5% year-over-year (YOY) to $64.2 million, falling short of analyst estimates for $64.94 million. Gross margins improved to 42.8% from 38%.
Total active providers rose to 102,000 from 91,000 last quarter. Total visits were 1.8 million versus 1.5 million last quarter. Subscription revenues were $28.7 million and visit revenues were $30.7 million.
The Company ended the quarter with $674.9 million. American Well co-CEO Dr. Ido Schoenberg commented,
“Q1 was a great start to an important year for Amwell. We made meaningful progress on the launch of Converge, our platform designed to enable trusted healthcare players to deliver the next generation of healthcare.”
In-Line Guidance
American Well expects fiscal full-year 2022 revenues between $275 million to $285 million versus $279.47 million. Adjusted EBITDA is expected between (-$200 million) to (-$190 million).
Conference Call Takeaways
Co-CEO Schoenberg started off by expressing that its development and migration of customers to the Converge platform is on track. The Company has moved past the rapid deployments of Amwell Now clients and are beginning its most complex migrations.
Amwell is a pure play digital care delivery enablement provider essential in the new era of hybrid healthcare. Visits on the Converge platform rose over 40% in Q4 2021 and accounted for 10% of total visits in Q1 2022. Its behavioral health platform, SilverCloud, is off to a great start with its automated features combined with virtual care to support health equity of patients in the post-pandemic era.
It’s Converge is designed to connect the care teams to coordinate consults for better outcomes and address care team burnouts. In a nutshell CEO Schoenberg sums up the platform,
“Converge offers options for managers to load balance and offload cases during peak times and can improve the standard of care, by simplifying integrations with new automation programs that enhance continuity between visits.
“Designed to do the heavy lifting, Converge incorporates rules and regulations, plus the documentation and payment systems that make digital care delivery so complex.
“Our solution can unify the care team’s resources and drive new efficient workflows to achieve sought after efficiencies so that the teams can focus on the delivery of care.”
American Well Stock Chart
AMWL Opportunistic Pullback Levels
Using the rifle charts on the weekly and daily time frames provides a precision view of the landscape for AMWL stock. Shares peaked near the $44.24 Fibonacci (fib) level on its post-IPO run up before plunging to a low of $2.52. The weekly rifle chart is attempting to reverse the downtrend as the 5-period weekly moving average (MA) slopes up at $3.24 to attempt a crossover through the 15-period MA at $3.60.
The weekly stochastic bounced back up through the 20-band as it attempts to grind towards the weekly upper Bollinger® Bands (BBs) at $5.10. The weekly market structure low (MSL) buy triggered on the $3.30 breakout.
The daily rifle chart formed a pup breakout with a rising 5-period MA support at $3.38 followed by the 15-period MA at $3.08. The daily 50-period MA sits at $3.53 with daily upper BBs at $3.88. The daily stochastic mini pup spiked through the 80-band. The daily 200-period MA sits at $6.18.
Prudent investors should not chase but rather wait for opportunistic pullback levels at the $3.30 daily MSL trigger, $2.94 fib, $2.74 fib, $2.52 fib, $2.28, $1.72 fib, and the $1.32 fib level. Upside trajectories range from the $4.59 fib up towards the $7.56 fib level.
