Cantor Fitzgerald initiated coverage on LifeMD Inc (NASDAQ:LFMD) with an Overweight rating and a price target of $7, an upside of almost double.
The analyst sees LifeMD as an undervalued, below-the-radar growth story in the virtual primary-care sector that will meet the hurdle of EBITDA positivity in ’23E and have several growth levers to drive further upside.
The analyst expects the company’s topline could grow in the 20-30% CAGR range over the next 3-5 years, moving towards long-term EBITDA margins of 25-30%.
Consumer demand is progressively infiltrating the $100-200B weight-loss medication market. LifeMD’s weight-management virtual clinic offers access to GLP-1 medications, nutrition, and coaching services, often identifying additional health conditions.
As LifeMD expands its staff and builds enterprise partnerships, new daily client intake could rise from 30 to potentially 400, the analyst expects.
The clinic charges consumers $387 per quarter and typically secures insurance coverage for medications or provides coupons for cash payments, thus leveraging growing consumer demand for weight-loss medications.
The analyst says the $7 price target is potentially conservative, citing the stock below peer average valuation despite having the highest gross margins, above-average EBITDA margins, and above-average topline growth compared to the peer group average.
Price Action: LFMD shares are up 18.10% at $4.18 on the last check Friday.
