Morgan Stanley Maintains a Buy Rating on LifeStance Health (LFST), Keeps the PT at $10
The analyst based the rating on the company's growth potential and strategic positioning, stating that LifeStance Health Group, Inc. (NASDAQ:LFST) is well-positioned to capitalize on the rising demand for outpatient mental health services.
A close-up of a healthcare professional studying a computer screen with data while consulting with a patient.
This trend is driven by reduced social stigma regarding seeking behavioral health care, along with a shift to in-network insurance coverage. According to the analyst, LifeStance Health Group, Inc. (NASDAQ:LFST) has a hybrid care model that mixes in-person and virtual visits, supporting this demand through increasing flexibility for both clinicians and patients.
The analyst further reasoned that LifeStance Health Group, Inc. (NASDAQ:LFST) is focusing on long-term EBITDA margin expansion, and management is confident about its potential to attain 15%-20% margins, up from the current guidance of around 10% by 2025.
Hettenbach expects various factors to drive this margin expansion, including center margins improvements, slower growth in general and administrative expenses relative to revenue, and the introduction of higher-margin services.
LifeStance Health Group, Inc. (NASDAQ:LFST) provides outpatient mental health services, including psychological and neuropsychological testing, psychiatric evaluations and treatment, and individual, family, and group therapy. The company operates through a mental health platform and also offers virtual care via its online delivery platform, as well as in-person care at centers located in 32 US states.
While we acknowledge the potential of LFST as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.
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