LifeStance Health Soars 12.75% on Strong Q1 Earnings

LifeStance Health's stock surged by 12.75% in pre-market trading on May 27, 2025, marking a significant rise that has caught the attention of investors and analysts alike.

UBS analyst Kevin Caliendo upgraded LifeStance Health to a Buy rating from Neutral, citing a significant gap between the company's current stock valuation and its actual performance metrics. The analyst believes that recent share price fluctuations are due to investor risk aversion and misinterpretations of the first-quarter results. UBS also downplayed concerns over LifeStance's temporary halt in adhering to the federal mental health parity rule, asserting that this pause should not affect the company's reimbursement rates or its trajectory for rate improvements.

LifeStance Health reported strong financial results for the first quarter of 2025, with revenue reaching $333 million, representing an 11% year-over-year growth. The company also saw a 10% increase in visit volumes to 2.1 million and a 152-clinician increase, bringing the total to 7,535. The total revenue per visit increased by 1% year over year to $159, while the center margin reached $110 million, 33.0% of revenue, a 16% increase year over year. Adjusted EBITDA grew by 25% year over year to $35 million, 10.4% of revenue, and the company achieved its first positive net income as a public company, amounting to $700,000. Free cash flow, although negative at $10 million, showed a $17 million improvement from the previous year. The company's cash reserves stood at $134 million, with $276 million in net long-term debt and leverage ratios of 1.2 times net and 2.3 times gross.

LifeStance Health's positive performance was further highlighted by its full-year guidance, which includes revenue projections of $1.4 billion to $1.44 billion, center margin guidance of $440 million to $464 million, and adjusted EBITDA guidance of $130 million to $150 million. For the second quarter, the company expects revenue between $332 million and $352 million, center margin between $100 million and $114 million, and adjusted EBITDA between $28 million and $34 million. The company's digital patient check-in tool has also contributed to higher patient satisfaction and operational efficiencies, driving significant improvements in patient collections.