Shares of Accolade (NYSE:ACCD) gained more than 23% in yesterday’s trading session on solid revenue growth in the fiscal third quarter. Also, the provider of health and benefits solutions raised its full-year outlook due to strong business performance so far in Fiscal 2023.
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The company’s Q3 sales grew 9% year-over-year to $90.9 million, exceeding analysts’ expectations of $87.5 million. The company’s topline benefited from strong direct-to-consumer business and a stable commercial customer count.
Meanwhile, Accolade reported a loss per share of $0.56 compared with earnings of $0.31 in the last year’s quarter. The Street’s expectation was pegged at a loss of $0.62.
The company raised its revenue guidance for Fiscal 2023. Accolade now expects full-year sales of $361 million to $365 million, up from prior guidance of $358 million to $365 million. The company also provided a preliminary Fiscal 2024 revenue outlook of about $410 million.
Should You Buy ACCD Stock?
Following the results, Needham analyst Ryan MacDonald reiterated a Buy rating on the stock with a $15 price target. MacDonald expects the ACCD stock to outperform in Calendar Year 2023, driven by solid growth in bookings and the possibility of business expansion with the T-5 contract.
Overall, the Street is cautiously optimistic about ACCD stock. This is based on five Buy and three Hold recommendations. The average Accolade price target of $12.94 implies 35.5% upside potential.
