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For investors who missed its earlier boom, now is the time to look again into Lifestance Health Group , according to Morgan Stanley. Analyst Craig Hettenbach named Lifestance a top pick, saying in a Monday note that he views the recent pullback in the stock as a “compelling buying opportunity” for investors who missed the play earlier this year. Lifestance is rated overweight at Morgan Stanley with a $10 price target, implying 32% upside over the next 12 months against Friday’s close. The stock is trading about 1.9% higher on Monday, clawing back recent losses. It has declined about 18% this month, but is still up 56% so far this year. LFST YTD mountain Lifestance Health Group stock. “Lifestance has delivered 3 straight quarters of beat and raise on revenue, led by improving clinician productivity and upside to organic growth in the number of clinician adds,” Hettenbach said, noting a positive impact from new company management. “While 2023 is the year of establishing a strong foundation by increasing investment in the business and delivering on operating initiatives, this should set the stage for margin expansion in 2024 and beyond.” The company is the largest independent behavioral health player, according to the note, with 3% market share in a $35 billion total addressable market. Lifestance offers in-person and online outpatient mental health services — including psychiatric evaluations and treatment, psychological, and neuropsychological testing and therapy — in 32 states across the U.S. The analyst said its market share gives it a “long runway for growth” and represents an “attractive compounding story.” — CNBC’s Michael Bloom contributed reporting.
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