This Forgotten About NASDAQ Has 220% Upside According To Prominent Wall Street Analysts

If you’ve followed the news at all during the last two years, you’ve probably heard of telehealth. If you haven’t, telehealth is the digital delivery of healthcare products and services, and represents the fastest growing segment of healthcare, having grown over 38x since 2019.

Unfortunately, the space is grossly misunderstood by investors, evidenced by the general investing public looking at stocks like Teladoc and Amwell as leaders in this rapidly growing space. Moreover, this rapidly growing space has been almost entirely forgotten and ignored by investors with virtually every single company in this space having sold off significantly from their 2020’s peak.

Although stocks getting beaten up after a period of hype is a story as old as investing itself, such moments represent massive opportunities for investors savvy enough to recognize the fundamental value behind these forgotten stocks. This is especially relevant to companies operating in telehealth, which is arguably the most disruptive movement in healthcare since the rise of orphan drugs and immunotherapies.

Given the nascent and underappreciated state of telehealth, investors able to identify and invest in companies in this space that are well-positioned to address currently untapped conditions and opportunities could realize unheard of gains in their portfolio.

Enter LifeMD, a telehealth company that trades on the NASDAQ under the ticker LFMD. This is a company that grew from $7 million in 2019 to over a $1 billion valuation in 2021 before selling off to its current $110 million market cap.

LifeMD’s growth is remarkable, having built and grown a business that is currently at an approximate ~$110+ million revenue run rate in just a few years. The company has demonstrated their unique ability to acquire patients efficiently at scale, the true key to any successful telehealth company. They’ve also demonstrated that they have a truly robust technology platform that can operate at scale while supporting a diverse and growing portfolio of telehealth offerings.

This can be seen in their accomplishments:

• LifeMD is a rapidly growing, early-mover in direct-to-patient telehealth. The Company owns a portfolio of brands that offer virtual medical care, diagnostics, prescription medications, and proprietary over-the-counter products.
• 93% of LifeMD’s revenue comes from recurring subscription. LifeMD generates revenue at a gross profit margin of >80% by providing virtual medical care for chronic conditions, and through the sale of prescription drugs and proprietary over-the-counter products.
• LifeMD appears to have a differentiated and defensible position in the telehealth space due to its vertically integrated technology platform, its growing 50-state medical group, and its direct-to-consumer marketing expertise. LifeMD’s portfolio is supported by multiple patent-protected products and preferential relationships with pharmaceutical and diagnostic companies with FDA approved products.
• LifeMD expects to generate ~$150M in revenue in 2022. 75% of this revenue comes from the telehealth business, and 25% comes from a non-core subsidiary called WorkSimpli. LifeMD management has stated it expects to divest this subsidiary this quarter, which should serve to further strengthen the Company’s balance sheet by being a source of non-dilutive capital for the rapidly growing telehealth business.
• LifeMD has guided that they will reach consolidated adjusted EBITDA profitability by Q4 of this year. Although the company is currently operating with a relatively weak balance sheet, assuming the sale of WorkSimpli this quarter and a business that is profitable or close to breakeven, our view is that LifeMD should be financed for a years to come.

In our view, the number one reason to own LifeMD now is because according to the company the imminent sale of their known core subsidiary. The company has guided multiple times that they are confident they will consumate this transaction in the fourth quarter, and that they expect 40-80 million dollars in proceeds from this transaction. As we said previously this is non-dilutive capital that should permanently finance LifeMD. We believe a 40+ million dollar cash infusion for LifeMD will be a major catalyst for the stock.

LifeMD shares are valued just over $2.50 a share today.

Here’s what top analysts believe it should be worth:

Across the board, the consensus is that LifeMD should be worth 5x what it trades at today.

Now compare this to the analyst consensus price targets of their telehealth peers.

It’s clear that the overwhelming majority of the street believes that LifeMD’s telehealth peers are trading close to their fair value and lack triple digit growth potential.

Finally, recent events and upcoming catalysts suggest that a major year may be in the works for the company and its shareholders.

LifeMD’s recent acquisition of Cleared, a leading digital allergy clinic, and the imminent launch of its virtual primary care platform, not only point at the company’s robust telehealth foundation, but may also be the first of many market moving events in the company’s path to accelerated growth and presence in 2022.

In LifeMD’s most recent analyst day call, they re-affirmed expected revenue of $250-300 million in 2025, with at least a 25% EBITDA margin. Growing to this stage as a profitable company could easily make them an attractive acquisition target for other telehealth companies or healthcare giants looking to enter this rapidly growing space.

If LFMD’s management team delivers on its promise of revenue growth and adjusted EBITDA profitability and is able to monetize its non-core subsidiary, LFMD could prove to be a major winner for intelligent investors, especially if shares return to anywhere close to the 30s from its current $3 lows.