AMWL Stock Forecast & Price Target

American Well Corp has demonstrated a positive financial outlook, with a 0.5% year-over-year increase in total revenue, primarily driven by a substantial 35.2% year-over-year growth in subscription revenue, reaching $36.9 million. The company's average revenue per visit rose to $77, reflecting a favorable shift towards specialty care visits, while gross margins expanded significantly by 1,470 basis points year-over-year to 48.4%, highlighting improved operational efficiency. Additionally, the expected increase in software-related revenue during the second quarter positions the company for further growth, with software expected to comprise nearly 60% of consolidated revenue by the end of the year.

American Well Corp's FY25 revenue guidance of $250 million to $260 million falls significantly short of consensus expectations of $312.3 million, reflecting a sluggish growth forecast of only 0.3% at the midpoint. The company's visit fee revenue and other revenue experienced notable year-over-year declines of 9.0% and 56.5%, respectively, compounding concerns regarding lower visit volumes and material contract losses moving forward. Although operating expenses decreased by 4.5% year-over-year, they exceeded estimated figures due to unanticipated high general and administrative costs, further underscoring ongoing operational challenges and heightened uncertainty regarding future financial performance in a competitive market.