• One Medical’s stock has fallen 34.7% in the past three months.
  • Its losses in the first quarter of 2021 were double what analysts expected.
  • However, most analysts reaffirmed their positive buying ratings, indicating continued expansion.
  • See more stories on the Insider business page.

After its last earnings call in May, One Medical appears to have lost its immediate shine in the stock market.

When the San Francisco-based primary care company announced that its losses per share were double what analysts expected, the company’s stock fell 8.4% after hours – a sign that some investors are worried about the financial future of One Medical.

As of Monday morning, One Medical’s stock was down about 22% since the start of 2021. Since its peak in February, the company’s valuation has fallen by about 44%.

Although CEO Amir Dan Rubin said One Medical acquired 598,000 members in the first quarter of 2021, a 31% increase from the same period last year, the company’s stock fell more than ‘a third of its maximum value in mid-February. .

However, short-term fluctuations in One Medical’s stock price have little or no relation to its ability to expand its core business model, Stephanie Davis, SVB Leerink healthcare technology and distribution analyst at Insider.

One Medical’s membership base includes patients who have access to its

physical primary care platform and clinics through an employer, as well as direct consumers.

The company’s second-quarter results could be a key test for the company as vaccinations increase, Davis said.

Falling COVID-19 test numbers likely contributed to One Medical’s drop in share price

Part of One Medical’s declining rating since February comes from information that the company let younger, healthier patients receive the COVID-19 vaccine early, including some personal relationships from the management team by One Medical.

Rubin denied the line-break ‘big mistakes’ in a follow-up call to investors, but then issued a letter promising to improve after the House coronavirus crisis committee opened an inquiry into the administration of vaccines from One Medical.

In line with rising vaccination rates and declining cases across the country, the company also noted that its COVID-19 testing volume had declined earlier than expected. This is in part the reason for the drop in One Medical’s valuation, Davis said.

In his first quarter earnings call, Rubin also highlighted One Medical’s recent partnerships with major healthcare systems and Pareto Health, a Philadelphia-based provident company that works with 1,400 employers across the country.

Thanks to Pareto, employees of this company will now have access to membership in One Medical. The two moves are comparable for the course and relatively unsurprising given One Medical’s broader plan to expand nationally, Davis said.

Despite the initial stock market reaction, most digital health research analysts still believe One Medical’s technological primary care model will pay off in the long term.

Across all of the Wall Street credit research firms covering One Medical, three analysts rated the stock as “pending” and 12 others issued a “buy” rating, according to MarketBeat.

In SVB Leerink’s most recent note on the company, Davis’s team lowered One Medical’s price target from $ 55 to $ 53, ranking it as an outperformer.

Q2 will be critical for One Medical to show if the business can grow

Looking at the company’s near future, Davis sees the next fiscal quarter as a test to determine whether One Medical’s business outside of COVID-19 testing and vaccinations will continue to grow.

“You’ll see what this looks like in a more standardized environment, so they can continue to show a high membership,” Davis said. “The new victories they have in the employer market – that should be more than enough.”

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, the market is moving away from companies whose overall business model seemed favorable to the worst of the pandemic, such as the telehealth company Teladoc. One Medical is unfairly classified among these companies, said Davis, although it specializes in primary care.