AMWL Stock Forecast & Price Target

American Well Corp has demonstrated a robust financial performance through significant year-over-year growth in key revenue metrics, with subscription revenue soaring by 35.2% to reach $36.9 million. The company has also achieved an impressive increase in average revenue per visit, now at $77, reflecting a strategic pivot toward more profitable specialty care consultations. Additionally, with gross margins expanding by 1,470 basis points year-over-year to 48.4%, American Well has shown enhanced operating leverage, positioning itself favorably for future revenue growth as it anticipates a one-time increase in software-related revenue.

American Well Corporation's FY25 guidance of $250 million to $260 million falls significantly short of the consensus estimate of $312.3 million, indicating a modest growth trajectory of only 0.3% at the midpoint, primarily affected by customer churn and the divestiture of APC. Revenues from visit fees and other services have declined year-over-year by 9.0% and 56.5%, respectively, and the expectation of lower visit volumes in FY25 further compounds concerns about the company's ability to achieve future growth. Operating expenses exceeded estimates due to unanticipated general and administrative costs, while long-term visibility on revenue growth remains low amidst heightened competition, reinforcing a cautious outlook on the stock.