2023-05-24 13:08:11 ET
Accolade, Inc. ( NASDAQ: ACCD ) shares spiked Wednesday after Bank of America upgraded the IT-led healthcare services company to Buy from Neutral, arguing that its recent earnings-led selloff and post-analyst day weakness was overdone.
Seattle, Washington-based Accolade ( ACCD ) provides a healthcare management platform for businesses and other clients. The company shares plunged in late April after its Q4 FY23 revenue fell short of expectations.
The stock continued to tumble following the analyst day in early May, even as the management raised the firm's FY25 outlook for EBITDA to 2% - 5% from 0% - 3%.
"The stock performance post-earnings and analyst day, due in large part to confusions over earnings cadence, we see as well overdone and leaves a highly appealing risk-reward for shares," BofA analyst Michael Cherny wrote.
Cherny also opines that the management's decision to raise the EBITDA guidance shows the company's earnings potential. He also added that ACCD is "moving fast towards breakeven, driven by revenue scaling as well as cost cuts in February that accelerated the pace of profitability."
More on Accolade
- Accolade jumps 13% as Guggenheim upgrades on improved outlook
- Accolade Sees Revenue Promise But Operating Breakeven Remains Distant
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Accolade raised to Buy at Bank of America; says recent selloff overdone