On Thursday, BofA Securities adjusted its stance on Apollo Medical Holdings (NASDAQ:AMEH), upgrading the stock from Neutral to Buy and raising the price target to $55.00 from the previous $44.00. The decision comes as the firm anticipates the company to experience significant revenue growth in the near future.
Apollo Medical Holdings is expected to double its revenue over the next few years, driven by the conversion of its RKK license and pending mergers and acquisitions. The company's growth prospects are also bolstered by new organic contract wins, strategic tuck-in deals, a reduction in tax rates, and the elimination of one-time headwinds.
The upgrade reflects BofA Securities' confidence in the company's growth trajectory and its ability to outperform market expectations. The firm's new price objective suggests a substantial 40% upside from the current levels.
According to BofA Securities, Apollo Medical's earnings before interest, taxes, depreciation, and amortization (EBITDA) are projected to surpass the consensus estimates for the years 2024 through 2026.
InvestingPro Insights
As Apollo Medical Holdings (NASDAQ:AMEH) receives an optimistic outlook from BofA Securities, with expectations of significant revenue growth, InvestingPro data supports this positive sentiment. The company's market capitalization stands at $1.91 billion, reflecting a solid presence in the healthcare sector. Moreover, the company's revenue over the last twelve months as of Q3 2023 is reported at $1.33 billion, with a notable growth rate of 27.06%. This aligns with the forecasted expansion BofA Securities anticipates.
One of the InvestingPro Tips that resonates with the upgraded status is the company's strong return over the last three months, which is at 15.84%. This performance could instill further confidence in investors looking for upward trends. Additionally, Apollo Medical is trading near its 52-week high, at 94.95% of the peak value, which may be indicative of sustained investor interest and market momentum.
Furthermore, analysts on InvestingPro predict that the company will be profitable this year, reinforcing BofA Securities' upgrade. For investors seeking more in-depth analysis, there are additional InvestingPro Tips available, including insights into Apollo Medical's debt levels, liquidity, and long-term profitability. To uncover these valuable tips, visit https://www.investing.com/pro/AMEH and consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. There are 6 more InvestingPro Tips waiting to help you make informed decisions.
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