Analyst Estimates: Here’s What Brokers Think Of American Well Corporation (NYSE:AMWL) After Its Second-Quarter Report

The investors in American Well Corporation‘s (NYSE:AMWL) will be rubbing their hands together with glee today, after the share price leapt 25% to US$11.05 in the week following its second-quarter results. It was a respectable set of results; while revenues of US$63m were in line with analyst predictions, statutory losses were 11% smaller than expected, with American Well losing US$3.36 per share. This is an important time for investors, as they can track a company’s performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for American Well

Taking into account the latest results, the current consensus from American Well’s twelve analysts is for revenues of US$262.3m in 2024. This would reflect a modest 2.9% increase on its revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 38% to US$12.77. Before this latest report, the consensus had been expecting revenues of US$261.5m and US$16.22 per share in losses. Although the revenue estimates have not really changed American Well’sfuture looks a little different to the past, with a very favorable reduction to the loss per share forecasts in particular.

There’s been no major changes to the consensus price target of US$34.50, suggesting that reduced loss estimates are not enough to have a long-term positive impact on the stock’s valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on American Well, with the most bullish analyst valuing it at US$66.00 and the most bearish at US$12.00 per share. So we wouldn’t be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the American Well’s past performance and to peers in the same industry. The analysts are definitely expecting American Well’s growth to accelerate, with the forecast 5.9% annualised growth to the end of 2024 ranking favourably alongside historical growth of 2.0% per annum over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 10% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, American Well is expected to grow slower than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it’s tracking in line with expectations. Although our data does suggest that American Well’s revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$34.50, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year’s earnings. At Simply Wall St, we have a full range of analyst estimates for American Well going out to 2026, and you can see them free on our platform here..

However, before you get too enthused, we’ve discovered 4 warning signs for American Well (1 doesn’t sit too well with us!) that you should be aware of.

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