American Well Corp's (NYSE:AMWL) Chief Financial Officer, Robert Shepardson, recently sold shares of the company's stock, primarily to cover tax liabilities associated with restricted stock units. The transaction, which occurred on October 1, 2024, involved the sale of 876 shares at a price of $9.1543 each, totaling approximately $8,019.
According to the SEC filing, the shares were sold as part of an automatic "sell to cover" transaction, which is a common method for executives to satisfy tax obligations that arise from the vesting of restricted stock units. It is important to note that this type of sale is not indicative of discretionary trading by the reporting individual.
Following the transaction, Shepardson still holds a significant amount of American Well stock, with 112,116 shares remaining in his possession. This indicates a continued vested interest in the company's performance and alignment with shareholder interests.
Investors often monitor insider transactions as they can provide insights into an executive's view of the company's future prospects. However, in cases like this where the transaction is related to tax obligations, the sales are less reflective of confidence levels and more a matter of financial planning.
American Well Corp, headquartered in Boston, Massachusetts, operates within the business services sector, providing telehealth solutions that connect patients with healthcare providers remotely. The company's stock is traded under the ticker AMWL on the New York Stock Exchange.
In other recent news, American Well Corp reported second-quarter 2024 revenue of $63 million, surpassing consensus estimates, and an adjusted EBITDA loss of $35 million, which was more favorable than the projected $40 million loss. TD Cowen, in response to these results, increased the price target for American Well to $12.00, up from the previous $2.00, while maintaining a Hold rating. Needham also maintained a Hold rating on the company's shares, awaiting further financial clarity.
American Well's ongoing rollout of services at five initial sites for the Defense Health Agency (DHA) is progressing as planned, with full enterprise deployment expected in December 2024. The company's collaboration with the DHA is seen as a significant step, with a long-term sustainment contract likely to be secured in the first quarter of 2025.
In other developments, American Well Corp amended the employment agreement with Kathy Weiler, the Chief Commercial & Growth Officer, providing her with various benefits should she leave her position without a "Good Reason" on or after June 1, 2025. Leadership changes have also taken place with Co-founder Roy Schoenberg transitioning to Executive Vice Chairman of the company's Board of Directors, and Ido Schoenberg assuming the role of sole Chief Executive Officer. These are recent developments within the company.
InvestingPro Insights
To provide additional context to the recent insider transaction at American Well Corp (NYSE:AMWL), it's worth examining some key financial metrics and insights from InvestingPro.
According to InvestingPro data, American Well Corp's market capitalization stands at $136.27 million, reflecting its current position in the telehealth market. The company's revenue for the last twelve months as of Q2 2024 was $254.91 million, with a revenue growth of -7.27% over the same period. This decline in revenue growth may be a factor for investors to consider when evaluating the company's performance.
InvestingPro Tips highlight that American Well Corp holds more cash than debt on its balance sheet, which could provide financial flexibility in the challenging telehealth market. However, the company is also quickly burning through cash, which aligns with the negative operating income of -$235.81 million reported for the last twelve months as of Q2 2024.
Despite these challenges, AMWL has shown strong returns over the last month and three months, with price total returns of 17.93% and 53.5% respectively. This recent stock performance could be of interest to investors, especially in light of the insider transaction reported.
It's important to note that analysts do not anticipate the company will be profitable this year, as indicated by another InvestingPro Tip. This insight, along with the fact that AMWL does not pay a dividend to shareholders, may influence investor expectations for near-term returns.
For those seeking a more comprehensive analysis, InvestingPro offers additional tips and insights beyond what's mentioned here. In fact, there are 8 more InvestingPro Tips available for American Well Corp, which could provide valuable perspective for investors considering the stock's potential.
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