GICS Sector : Healthcare
Ontrak, Inc.operates as an artificial intelligence powered, telehealth-enabled, and virtualized healthcare company that provides in-person services to health plans and other third-party payors in the United States.Its technology-enabled platform predicts people whose chronic disease will improve with behavior change, recommends effective care pathways that people are willing to follow, and engages and guides them to and through the care they need.
Ontrak Health reported a mixed Q1 2025 performance, with revenues declining 25% year-over-year to $2 million, driven by the loss of a major customer. The company posted a net loss of $12.8 million, or -$9.54 per share, significantly below consensus estimates of -$1.35. Gross margin contracted to 37% from higher member acquisition costs and a shift in member mix toward the lower-priced Engage program. Despite revenue challenges, Ontrak achieved its highest new member additions since Q3 2021, with 2,039 new members joining during the quarter, reflecting strong demand for its AI-driven engagement platform.
Publication Date: May -21
Ontrak's total enrolled members reached 3,165, nearly doubling year-over-year, with over 1,150 members in the Engage program. The company highlighted its progress in expanding its outreach pool and improving operational efficiency, with productivity per employee rising despite a smaller workforce. CEO Terren Pepple noted, "Our AI-powered engagement system is resonating with health plans, and we're seeing promising interest in our pipeline." The company is optimistic about converting a large Midwestern Medicaid plan, which could add significant revenue, along with four active proposals under review and strong mid-funnel prospects.
Ontrak's provider model strategy and NCQA certification continue to strengthen its market position, with plans for further accreditation in 2026. The company also secured $1.5 million under its Keep Well agreement and announced a new $10 million financing agreement to support growth initiatives. While cash flow from operations was negative $2.7 million, Ontrak maintained $4.1 million in cash reserves. Management guided Q2 revenue between $2.2-2.6 million, reflecting an 8-22% sequential increase, driven by potential pipeline conversions and expansions.
Ontrak's stock currently trades at a price-to-sales (P/S) ratio of 0.61, reflecting the market's cautious stance on its growth prospects despite strong top-line momentum. The company's negative P/E ratio of -0.33 highlights ongoing profitability challenges, while its EV/EBITDA of -0.56 underscores the speculative nature of the investment. With analysts forecasting 55.3% revenue growth next year, the stock appears priced for recovery, but execution risks remain elevated.
Ontrak (OTRK) Upgraded to Buy: Here's Why
Jul -11
Here's Why Ontrak (OTRK) Could be Great Choice for a Bottom Fisher
Jul -11
Ontrak Health Announces Pricing of $4 Million Public Offering
Jun -27
Ontrak Health Announces Expansion of Engage Solution for Sentara Health Plans Self-funded Employer Customers
Jun -24
Ontrak, Inc. (OTRK) Q1 2025 Earnings Call Transcript
May -20
Ontrak Secures Financing Commitment to Fuel Growth and Innovation
May -20
Ontrak Achieves NCQA Recertification as a Credentialing Verification Organization
Apr -30
Ontrak, Inc. (OTRK) Q4 2024 Earnings Call Transcript
Apr -14
Ontrak, Inc.'s Government segment growth of 10.47% is driven by increasing demand for behavioral health solutions, expansion of government contracts, and strategic partnerships. Additionally, the company's focus on value-based care and population health management has led to higher adoption rates among government agencies, contributing to the segment's growth.
Ontrak's commercial segment growth of 10.55% is driven by increasing demand for its AI-powered behavioral health solutions, expansion into new markets, and strategic partnerships with healthcare providers. Additionally, the company's focus on improving member engagement and reducing healthcare costs has led to increased adoption and retention rates, further fueling growth.
A comprehensive, AI-powered, data-driven platform that identifies and engages high-risk, high-cost members, providing personalized interventions to improve health outcomes and reduce healthcare costs.
A real-time, data-driven platform that identifies and engages high-risk, high-cost members, providing personalized interventions to improve health outcomes and reduce healthcare costs.
A comprehensive, data-driven platform that identifies and engages high-risk, high-cost members, providing personalized interventions to improve health outcomes and reduce healthcare costs.
A comprehensive, data-driven platform that identifies and engages high-risk, high-cost members, providing personalized interventions to improve health outcomes and reduce healthcare costs.
Ontrak, Inc. operates in a niche market, providing digital care programs for health plans and self-insured employers. While there are some substitutes available, they are not as comprehensive as Ontrak's offerings, reducing the threat of substitutes.
Ontrak, Inc.'s customers are primarily health plans and self-insured employers, which have limited bargaining power due to the specialized nature of Ontrak's services.
Ontrak, Inc. has a diversified supplier base, reducing the bargaining power of individual suppliers. Additionally, the company's digital nature reduces its reliance on physical suppliers.
While there are barriers to entry in the digital healthcare market, Ontrak, Inc. faces some threat from new entrants, particularly from established healthcare companies expanding their digital offerings.
The digital healthcare market is highly competitive, with several established players competing for market share. Ontrak, Inc. must differentiate itself through its unique offerings and customer service to maintain its position.
| Value | |
|---|---|
| Debt Weight | 9.64% |
| Debt Cost | 16.45% |
| Equity Weight | 90.36% |
| Equity Cost | 16.45% |
| WACC | 16.45% |
| Leverage | 10.67% |
Value: 7.6
Growth: 6.9
Quality: 7.8
Yield: 0.0
Momentum: 8.0
Volatility: 1.0
1-Year Total Return ->
Value: 7.5
Growth: 3.0
Quality: 5.1
Yield: 0.0
Momentum: 9.5
Volatility: 5.3
1-Year Total Return ->
Value: 8.7
Growth: 5.3
Quality: 4.1
Yield: 0.0
Momentum: 2.5
Volatility: 2.3
1-Year Total Return ->
Value: 10.0
Growth: 3.2
Quality: 3.6
Yield: 0.0
Momentum: 5.0
Volatility: 0.0
1-Year Total Return ->
Value: 9.6
Growth: 3.9
Quality: 4.3
Yield: 0.0
Momentum: 1.0
Volatility: 2.0
1-Year Total Return ->
Value: 10.0
Growth: 4.1
Quality: 3.4
Yield: 0.0
Momentum: 0.0
Volatility: 0.0
1-Year Total Return ->