OTRK - Ontrak: Teething Problems Aside A Promising Telemedicine Play With A Unique Business Model

• Ontrak is a telemedicine company with a difference. The company earns its revenues from health insurers by assisting plan members with behavioral health conditions.
• Ontrak uses coaches to help patients manage their chronic health conditions which theoretically saves health insurers from high medical expenses.
• The company is promising a 5:1 ROI on every member it enrolls and has added ~15k members to date via deals with Cigna, Aetna and Centene.
• There are issues however. The company has issued $45m of notes paying ~15% interest, its business model is somewhat unproven, and it's a target for short sellers.
• There are some question marks about how telemedicine will grow in a post-pandemic environment, but I don't have too many doubts about Ontrak. I broadly agree with analysts' 12-month price targets of $85.

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