Oak Street Slips On Wider-Than-Expected 4Q Loss; Street Sees 29% Upside

Shares of Oak Street Health fell 2.4% in Tuesday’s extended trading session after the operator of primary care centers for adults on Medicare reported a wider-than-expected loss for 4Q.

Oak Street (OSH) reported a net loss of $0.40 per share for the quarter, which was significantly wider than the Street’s estimates of a loss of $0.27 per share.

4Q revenues grew 43% year-over-year to $248.7 million and surpassed analysts’ expectations of $231.8 million. The company’s top-line performance reflected benefits from new center openings. In 2020, it opened 28 new care centers, including 12 centers in 4Q. (See Oak Street Health stock analysis on TipRanks)

For 1Q, Oak Street expects revenues of between $280 million and $285 million, which is well above the consensus estimate of $276.2 million. Additionally, the mid-point of the company’s full-year revenue guidance range of $1.275-$1.325 billion is in line with Street expectations.

On Feb. 17, Piper Sandler analyst Sean Wieland raised the stock’s price target to $69 (29.6% upside potential) from $59 and reiterated a Buy rating. In a note to investors, Wieland stated that the company is enhancing its footholds in the large and underpenetrated primary care space.

Overall, the rest of the Street has a bullish outlook on the stock with a Strong Buy consensus rating based on 6 Buys and 1 Hold. The average analyst price target of $68.60 implies upside potential of about 28.8% to current levels. Shares have gained about 6.5% since its listing on Aug. 6, 2020.