What happened
On a decent trading day for most stocks, American Well (AMWL +0.90%) didn't do so well on Wednesday. The healthcare tech solutions provider saw its share price erode by more than 6% on the back of two analyst moves.
So what
The first of these was a price target cut from Piper Sandler's Jessica Tassan, who now feels American Well -- aka Amwell -- is worth $5 per share these days, down from her previous level of $6. She's maintaining her overweight (buy, in other words) recommendation, however.
She feels that the company has executed well so far this year; the cut was due to adjustments to her forecasts following second-quarter results. That quarter saw Amwell notch slight beats on both the top and bottom lines while proffering full-year guidance that broadly met analyst expectations.
That rather lukewarm take on the company was matched by Truist Securities' Jailendra Singh, who initiated his coverage on Amwell stock Wednesday morning. Like Tassan, Singh pegs the stock as being worth $5 per share, but his recommendation is hold.
The Truist prognosticator wrote in his research note that the company expects revenue growth to snowball as it approaches breakeven in earnings before interest, taxes, depreciation, and amortization (EBITDA) by the second half of 2025. But Singh is concerned with how Amwell might hold up in an increasingly competitive environment for telemedicine services.
Now what
Some caution is certainly warranted on Amwell stock. Yes, it's executing well, and the telemedicine space has a bright future generally. However, the company continues to land deeply in the red on the bottom line, and its revenue growth has been relatively modest recently.
