2023-03-23 10:59:18 ET
- Shares of IT-led healthcare services company Accolade ( NASDAQ: ACCD ) added ~13% on Thursday to reach an 11-month high after Guggenheim upgraded it to Buy from Neutral, citing an improved profitability outlook.
- The analyst Sandy Draper said that the firm started “warming up to” Accolade ( ACCD ) after its benefits management survey “highlighted Advocacy/Navigator benefits as an increasing area of focus.”
- “Since then, the company has had a strong CY22 selling season, demonstrated solid gross revenue retention, and indicated a faster than expected path to cash break even,” Draper wrote, adding that management remarks at several investor meetings also reinforced her conviction to upgrade.
- The company is likely to trade at a higher multiple as investors factor in “improved growth outlook and profitability,” the analyst said, noting that their current model has yet to account for the improved profitability outlook.
- “ACCD is providing a much-needed service to a very confusing and complex industry,” Seeking Alpha contributor Creative Capital Ideas argued in January, issuing a Buy rating on the stock.
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Accolade jumps 13% as Guggenheim upgrades on improved outlook