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American Well Corporation AMWL shares rallied 18.8% in the last trading session to close at $8.58. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 22.4% loss over the past four weeks.
American Well scored a strong price increase driven by investors’ optimism following the news of the company selling its Amwell Psychiatric Care ("APC") business to Avel eCare, a national leading provider of clinician-to-clinician telehealth services. Avel eCare is purchasing the APC business for approximately $21M in cash at closing and an additional earn-out payment. The transaction will strengthen American Well's balance sheet while emphasizing the focus on growing accretive software contribution in the product mix.
This company is expected to post quarterly loss of $2.82 per share in its upcoming report, which represents a year-over-year change of +17.1%. Revenues are expected to be $66.57 million, down 5.8% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For American Well, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on AMWL going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
American Well is part of the Zacks Medical Info Systems industry. Standard BioTools LAB, another stock in the same industry, closed the last trading session 26.4% higher at $2.06. LAB has returned -14.7% in the past month.
For Standard BioTools , the consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.03. This represents a change of +62.5% from what the company reported a year ago. Standard BioTools currently has a Zacks Rank of #3 (Hold).
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American Well Corporation (AMWL) : Free Stock Analysis Report