AGP starts UpHealth at buy; PT $4.30


Alliance Global Partners initiated coverage of UpHealth (NYSE:UPH) with a “buy” rating and price target of $4.30. The stock closed at $1.45 on June 8.

UpHealth operates as a digital health services company in the Americas, Europe, and Asia through three segments: integrated care management, virtual care infrastructure, and services.

Analyst Ben Haynor writes that UpHealth has suggested that 2023 will be a “recalibration” year. “Based on their comments on both conference calls and SEC filings, we see the overarching meaning as resetting to a baseline level of business from which they can build,” he added.

Mr. Haynor said the company has reduced the size of its workforce and brought in new leadership as well as prioritized areas of the business with strong offerings and customer relationships, while ceasing initiatives that had yet to produce results, such as international activities.

The company has put in place a three-year plan to execute on its “One UpHealth” strategy, he said. The strategy entails integrating their population health (ICM) and telehealth (VCI) technologies; expanding into data and analytics services to a great degree to complement existing offerings; and incorporating machine learning/artificial intelligence into the telehealth offering.

In terms of commercialization priorities, UpHealth intends to rebuild its sales pipeline of the ICM and VCI businesses with a goal of tripling the pipeline by year-end, Mr. Haynor said. The company has employed a more robust client engagement model and identified 36 strategic accounts it intends to focus on.

To measure their progress, Mr. Haynor said UpHealth intends to look at several key performance indicators. First, the number of lives served by the ICM unit, which stood at roughly nine million exiting 2022. Second, the number of care venues for VCI, which was more than 2,800 at the end of the first quarter. Finally, the number of encounters for the TTM healthcare business is the main KPI for the services segment.