American Well and Robinhood Markets are two stocks that have jumped in their early days of trading but have dropped hard of late. They are both trading under the prices they opened at on their first day, but is it worth it to add them to your portfolio today?
1. American Well
American Well, which is known as Amwell, is a telehealth company that first went public in Sept. 2020 at an opening price per share of $25.51. Even Google has invested $100 million in the promising business. Shares of Amwell ended up rallying to over $41 a few weeks later in Oct. But the rally did not last long, and investors who purchased the stock then likely cringe at the very sight of the stock value today, well under $5 per share.
The company is pivoting more toward being a provider of delivering digital care, which means it will depend less on telehealth visits for its revenue growth. Its new Converge platform has combined multiple health apps in one place for its patients, with Amwell stating that it has been “designed to better serve the full care spectrum across virtual, physical and automated modalities.” Health systems, businesses offering health plans, and innovators creating products pay subscriptions for access to its platform, which then enable them to provide telehealth solutions to their members and patients. Last quarter, Amwell’s revenue of about $62 million was flat from the same period a year before, and sales that have come from its platform subscription has totaled $26.7 million, increasing by a modest 3.5%.
Amwell might be a promising healthcare stock to add to your portfolio, but investors may want to wait until it releases its most recent numbers (which might not be until the end of March) to see just how well the adoption of its platform is coming along.
Robinhood is a newer stock than Amwell is; it went public in July of last year. Its starting price of $38 would end up doubling and reaching a high of $85 on August 4, 2021. But same as Amwell, the excitement and hype have died down, and as of today, shares of Robinhood are sitting around $12.
The fintech firm provides commission-free trading and it has been popular with new traders, getting them hyped about stock trading. Unsurprisingly, the hype of cryptos has played a large part in that, as well. The firm said for the period ending September 30, 2021, transactions connected to Dogecoin (CRYPTO:DOGE) has accounted for 40% of all of its cryptocurrency transactions. And that was down from 62% a quarter before that. While Robinhood’s stock value has suffered more significant losses than crypto over the last several months, the two have for the most part moved in similar directions.
Robinhood says it is creating more products to help drive its growth, such as cryptocurrency wallets, which it hopes to officially release in the first quarter of this year. In Oct. 2021, management said over a million people were signed up on the waiting list for its cryptocurrency wallet. Robinhood has also reported that its active monthly users as of Dec. 2021 totaled 17.3 million, increasing 48% from a year prior. That growth has helped drive the company’s 89% year-over-year boost in revenue.