Analysts downgrade Accolade on lower 2023 guidance; loss of client


Analysts for SVB Securities and BTIG downgraded Accolade (NASDAQ:ACCD) after the company reduced the growth of its fiscal 2023 guidance to 15% year-over-year from 25% and the loss of Comcast as Accolade’s flagship client and strategic investor.

Accolade is a high-growth healthcare technology company whose mission is to help members and customers better navigate the healthcare ecosystem. 

Analyst Stephanie Davis of SVB cut Accolade to “market perform” and slashed her price target to $8 from $52. The stock closed at $11.06 on April 28.

“Combined with a brief public operating history, Accolade now shoulders a greater burden of proof to re-energize its shares,” Ms. Davis said.

“For a patient investor that has a longer-term time horizon, we do believe Accolade’s current trading level of 1.2 times fiscal 2023 revenues is deeply discounted, compared with its true value,” she said, adding “it is highly unusual for a high growth disruptor to trade anywhere near 1 times revenues.” 

Analyst David Larsen of BTIG downgraded Accolade to “neutral” and removed his price target.

Mr. Larsen said Accolade once again highlighted that it expects to break even in fiscal 2025 and the “revised fiscal 2023 estimated EBITDA guide is favorable relative to the previous outlook.”

However, “our view is that investors want to see earnings sooner rather than later, and the stock has traded down from about $50 over the past year, partly due to the lack of EBITDA,” he added. 

“With a volatile market, and tough tape, we believe that it is more important for investors to identify companies and stocks with good, stable and consistent earnings power,” Mr. Larsen said.