Shares of American Well (AMWL -3.17%) crashed on Thursday, closing the session 21.7% lower. The decline came after the telehealth services company delivered its first-quarter update after the bell on Wednesday.
Amwell reported Q1 revenue of $57.6 million, up 7% year over year. That fell short of the analysts' consensus estimate of $58.75 million. The company's net loss of $39.8 million, or $0.16 per share, though, was better than the loss of $0.19 per share expected by analysts.
The main reason why the healthcare stock plunged, however, was that Amwell's sales growth is slowing significantly. In the previous quarter, the company announced year-over-year revenue growth of 34%.
This deceleration shouldn't be surprising. The beginning of the COVID-19 pandemic last year provided a huge catalyst for telehealth services providers. It would be unrealistic to expect them to be able to sustain those growth rates.
Amwell Chairman and co-CEO Ido Schoenberg viewed his company's Q1 performance in a different light than many investors. "Our first quarter results represent a strong start to the year and demonstrate continued momentum across our business," he said.
Amwell maintained its previous full-year 2021 guidance for revenue in the range of $260 million to $270 million. At the midpoint, that would be a year-over-year increase of 8%.