Morgan Stanley Lifts Accolade’s Goal Value to $60, Reiterates Chubby Ranking


Morgan Stanley raised their inventory worth forecast on Accolade to $60 from $57, reiterating an “Chubby” ranking on the well being expertise firm and stated the upped forecasts replicate the mix of upper 4Q preliminary outcomes and better confidence within the sustainability of the airline shopper base restoration.

“Our FY2021 income estimate will increase to $168.5M, from $164.6M prior, in keeping with the previewed FY2021 income vary of $168M-$169M. Our 2022 income estimate will increase to $257.7M from $202.3M implying 53% development y/y and is within the higher half of consensus income estimates of $252M-$259M. Our 2023 income estimate will increase to $339M from $290.6M, reflecting the upper FY2022 base and implying 31% development y/y versus long-term targets of 25%,” stated Ricky Goldwasser, fairness analyst at Morgan Stanley.

“Extra M&A offers room for upside. The non-public providing of $250M of 2026 convertible notes replenishes Accolade’s stability sheet following the completion of the 2nd.MD acquisition in late February. The notes embrace an rate of interest of 0.50% per yr with an preliminary conversion worth of $50.48/share of Accolade frequent inventory. We estimate the extra money raised offers Accolade with the pliability to execute on acquisitions with $25M-$50M of income (assuming 5-10x EV/Income and in comparison with 2nd.MD revenues of $35M in CY20), which may probably add 10%-20% of income development.”

Accolade’s shares, which surged over 10% because the firm’s IPO in early July, traded about 1% larger at $47.32 on Monday.

Eight analysts who provided inventory rankings for Accolade within the final three months forecast the typical worth in 12 months at $58.88 with a excessive forecast of $65.00 and a low forecast of $54.00.

The common worth goal represents a 23.83% improve from the final worth of $47.55. Of these eight fairness analysts, seven rated “Purchase”, one rated “Maintain” whereas none rated “Promote”, in response to Tipranks.

Different fairness analysts additionally not too long ago up to date their inventory outlook. Accolade had its worth goal boosted by Canaccord Genuity to $62 from $59. Canaccord Genuity presently has a purchase ranking on the inventory. Credit score Suisse Group upgraded to an outperform ranking from a impartial and raised their worth goal to $60 from $45.

Furthermore, SVB Leerink lifted their goal worth to $56 from $53 and gave the corporate a market carry out ranking. Piper Sandler lifted their goal worth to $60 from $57 and gave the corporate an chubby ranking.

“The underpenetrated $13 billion+ ASO market helps wholesome development runway. We estimate that including ~2 Strategic purchasers per yr with the Accolade Complete Well being and Advantages service would help a 20%-30% topline development profile for the following 3 years. Present penetration is <1%,” Morgan Stanley’s Goldwasser added.

“Decrease-touch service choices assist diversify the shopper base and permit for a land-and-expand development alternative. Growing engagement, enhancing member outcomes, and driving down prices all result in a virtuous cycle that drives natural margin growth. The subscription mannequin gives excessive visibility into future income streams.”

Take a look at FX Empire’s earnings calendar

Supply hyperlink

Leave a reply