BTIG Starts Lifestance Health Group (LFST) at Buy

BTIG analyst David Larsen initiates coverage on Lifestance Health Group (NASDAQ: LFST) with a Buy rating and a price target of $8.00.

The analyst comments "We are initiating coverage of LifeStance Health Group (LFST) with a Buy rating and a PT of $8. LifeStance is one of the country's largest outpatient mental health providers, with 7,500+ clinicians across ~33 states and 550+ centers. LFST provided care for 940K+ unique patients in 2024, with ~7.9M visits. The key consideration with LFST in our view, is that ~90%+ of the company's patients are Commercially insured, which means that LFST is well-networked into health systems, referring hospitals and provider groups, health plans, and the established medical industry. Our view is that these Commercially insured lives are the most attractive segment of the market to support because Commercial Insurance rates are typically well above Medicare and Medicaid rates. We also believe that competing virtualonly Self-Pay options, like BetterHelp (TDOC, Neutral), are subject to high Direct to Consumer (DTC) advertising costs, member retention challenges, and inconsistent margins. We like how LFST provides both virtual (70%) and in-person (30%) care with an extensive range of services including the ability to prescribe medications, therapy, psycho-therapy, and advanced treatment options. In our view LifeStance is differentiated from peers because of this thorough, in-person and virtual care model, our channel checks indicate that the therapists usually face high demand, likely due to the referral relationships that LFST has built, and the overall business continues to grow. We like how LFST has a ~10%+ adjusted EBITDA margin, revenue growth in 2025E will likely be ~10-15% y/y, we expect well over ~$100M in CFFO in 2026E, and the TAM is large with ~60M+ people in the US potentially needing care."

For an analyst ratings summary and ratings history on Lifestance Health Group click here. For more ratings news on Lifestance Health Group click here.

Shares of Lifestance Health Group closed at $4.14 yesterday.

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