1Life Healthcare ( NASDAQ: ONEM ) stock rose ~10% on July 7 after BTIG Research upgraded the stock to Buy following reports that the company was considering alternatives after getting takeover interest.
The SA Quant Rating on ONEM is Hold , which takes into account factors such as growth and profitability, among other things. The rating is in contrast to the average Wall Street Analysts' Rating of Buy , wherein 8 out of 17 analysts give it a Strong Buy rating. YTD, the stock has declined ~38% . See chart here .
BTIG Analyst David Larsen said that in the firm's view 1Life provides a high-value service to its patients, where cost and efficacy are impacted.
Larsen added that over the past nearly two years the stock has traded from ~$60 to ~$10, and that the multiple is more reasonable now than it was in the past. The firm also thinks that the odds of 1Life being acquired are fairly high.
Earlier, in the week, the stock gained after it was reported that 1Life, the parent of One Medical clinics, was said to have drawn acquisition interest from companies including CVS Health ( CVS ).
Larsen noted that the firm continue to see valuation upside potential from here, led by improving Medicare margins, steady membership and FFS revenue growth, cross-sales between Medicare and Commercial and slowing of COVID.
According to the firm, potential acquirers could include CVS or large health plans such as UnitedHealth ( UNH ), Elevance Health ( ELV ), Humana ( HUM ) or potentially a large publicly traded hospital system.
Larsen added that the firm also liked how the Medicare margin within 1Life got better by ~10 percentage points of revenue in Q1'22, relative to Q4'21.
A day ago Citi said that a potential buyout of 1Life ( ONEM ) could come at a " significant premium " to its unaffected share price.
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1Life Healthcare soars 10% as BTIG upgrades, sees large health plans among potential acquirers