Lifestance Health Group Maintains Hold Rating with Limited Valuation Potential Despite Positive Trends – TipRanks Financial Blog

TD Cowen analyst Gary Taylor maintained a Hold rating on Lifestance Health Group (LFST – Research Report) yesterday and set a price target of $8.50.

Gary Taylor has given his Hold rating due to a combination of factors including Lifestance Health Group’s recent financial performance and future guidance. The company’s fourth-quarter revenue and EBITDA slightly surpassed Taylor’s predictive model, and their projections for 2024 follow this positive trend. Despite this, Taylor maintains that the stock’s valuation potential remains limited. He acknowledges the operational improvements the company is implementing, which may be contributing to the financial upticks, but these do not appear to sufficiently influence the overall long-term valuation to warrant a more aggressive investment stance.

Additionally, while Taylor has adjusted his EBITDA estimates upwards for the years 2024 and 2025—from $81 million and $123 million to $86 million and $131 million, respectively—he has also revised the stock’s price target upward from $6 to $8.50. This new price target is based on applying a 2.5 times enterprise value-to-sales multiple to the company’s estimated revenue for the year 2025. Despite this increased price target, the adjustment does not seem to be enough to shift the stock rating beyond a Hold, suggesting that while the company is moving in the right direction, the current market conditions and company specifics do not merit a more bullish rating at this time.

In another report released yesterday, UBS also maintained a Hold rating on the stock with a $9.00 price target.

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Lifestance Health Group (LFST) Company Description:

LifeStance Health Group Inc is a providers of virtual and in-person outpatient mental health care for children, adolescents and adults experiencing a variety of mental health conditions. The company delivers personalized, data-driven and comprehensive care to help patients stay healthy and employs over 3,300 psychiatrists, advanced practice nurses, psychologists and therapists.

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