Morgan Stanley Maintains a Buy Rating on LifeStance Health (LFST), Keeps the PT at $10

LifeStance Health Group, Inc. (NASDAQ:LFST) is one of the 13 Stocks Under $5 With High Upside Potential. On May 27, Morgan Stanley analyst Craig Hettenbach maintained a Buy rating on LifeStance Health Group, Inc. (NASDAQ:LFST), keeping the associated price target the same 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.

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.

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