LifeMD and Medifast CEOs Believe Market Overreacted to Eli Lilly’s New Digital Healthcare Experience
LifeMD (LFMD) and Medifast (MED) are two telehealth companies that have recently experienced a decline in share prices due to the launch of Eli Lilly’s (LLY) new digital healthcare experience. The program allows patients to directly order medications from the manufacturer, including obesity treatment drugs. This has caused a decline in share prices for telehealth companies such as Hims & Hers (HIMS), LifeMD (LFMD), and Medifast (MED).
LifeMD Co-Founder and CEO Justin Schreiber and Medifast CEO Dan Chard believe that the market’s reaction was an “overreaction” to the news. In a recent interview with Yahoo Finance, Schreiber and Chard discussed their respective companies’ stock and why they believe that the market’s reaction was an overreaction. They also shared their insights on the potential impact of Eli Lilly’s new digital healthcare experience on the telehealth industry.
According to Schreiber, there is no difference in price for patients who choose to go directly to Lilly with the LillyDirect program. He also mentioned that providers from any part of the country can send prescriptions to this program, making it easier for patients to access drugs when they cannot find them at a neighborhood pharmacy.
LifeMD’s fair value estimate using the 2 Stage Free Cash Flow to Equity is US$5.89, while its current share price of US$7.77 suggests that it may be overvalued by 32%. On the other hand, the analyst price target for LFMD is US$10.20, which is 73% higher than the estimated fair value. This indicates that the company’s current stock price may be undervalued.
Using the Discounted Cash Flow (DCF) model, we can see that LifeMD’s intrinsic value is US$230 million. This is a 32% discount to its current stock price of US$7.77.
Eli Lilly’s new digital healthcare experience has caused a decline in share prices for telehealth companies. According to industry experts, the market’s reaction was an overreaction.
