Accolade, Inc. (ACCD) provides solutions combining virtual primary care, mental health support, and expert medical services with technology and best-in-class care navigation. It recently launched two new healthcare solutions, Accolade One, and Accolade Care.
Let’s have a look at Accolade’s recent Q2 financials and what has changed in its key risk factors that investors should know.
Accolade’s Q2 revenue surged 99.2% year-over-year to $73.3 million, outperforming estimates by $2.9 million.
At its recent Evolve21 customer conference, Accolade introduced Personalized Healthcare, which is a new category that enables a scalable model of value-based care.
Rajeev Singh, the CEO of the company commented, “Personalized Healthcare requires all healthcare companies to step up and offer solutions that deliver a personalized experience, are powered by data-driven insights, and align the financial model with demonstrated value.”
Higher cost of revenue and operating expenses resulted in net loss per share of the company widening to $0.97 from $0.47 a year ago. Analysts had expected a net loss per share of $0.56.
Looking ahead, Accolade expects Q3 revenue to be in the range of $74.5 million to $76.5 million. (See Insiders’ Hot Stocks on TipRanks)
On October 8, Berenberg Bank analyst Iris Long reiterated a Buy rating on the stock, and maintained a price target of $61.
Long believes Accolade One and Accolade Care are “compelling” solutions in the employee benefits market and are likely to have modest contributions in fiscal 2023.
Based on nine unanimous Buys, consensus on the Street is a Strong Buy. The average Accolade price target of $55.78 implies a 45.9% potential upside for the stock.
Risk Factors
According to the new TipRanks Risk Factors tool, Accolade’s main risk category is Finance & Corporate, accounting for 41% of the 58 risks identified.
Under the Production risk category, Accolade noted in its virtual care business, it is dependent on affiliated professional entities for providing physician services. If relationships with these affiliates get disrupted, or if these arrangements are found in violation of state laws that prohibit the corporate practice of medicine or fee-splitting, then Accolade’s business may get negatively affected.
Under the Ability to Sell risk category, Accolade highlighted that its direct-to-consumer virtual care business makes use of the member subscriptions model. If the company fails to comply with laws associated with the collection of auto-renewing subscription fees then it may face liability or harm to reputation.
The company also added that its marketing efforts for the direct-to-consumer virtual primary care part of its business may not achieve success or may become more expensive. Either of these scenarios might lead to higher costs, as well as a negative impact on Accolade’s business.
The sector average Finance & Corporate risk factor is 50%. Shares are down 28.3% over the past three months.
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