B. Riley Reaffirms LifeMD as Top Digital Health Pick with $10 Target

B. Riley Securities has reaffirmed LifeMD Inc. (LFMD) as its top investment pick in the digital health sector, maintaining its Buy rating and $10 price target on the company's stock. The investment firm noted that a recent sell-off presents a buying opportunity, as its core investment thesis remains intact and is bolstered by several new near-term catalysts.

Key Catalysts Underpin Outlook

In a note to clients, B. Riley highlighted several key developments that support its positive view on the telehealth provider. The firm pointed to a combination of new programs and regulatory events expected to drive growth and profitability.

Key factors cited by the firm include:

• Medicare GLP-1 Program: LifeMD launched its Medicare GLP-1 Bridge program on July 1. B. Riley noted that new CMS guidance confirms coverage for popular weight-loss drugs like Wegovy and Zepbound, marking the first time Medicare will reimburse these medications for obesity. This is expected to create a new channel for patient acquisition without cannibalizing the existing cash-pay business.
• Branded Pharmacy Collaboration: A new exclusive telehealth partnership with Antares for a direct-to-patient XYOSTED program serves as the first proof point of LifeMD's ability to capture branded pharmacy revenue. The company will manage evaluation, dispensing, and fulfillment, capturing both dispensing margins and recurring subscription fees.
• Potential Compounding Revenue: An upcoming FDA Pharmacy Compounding Advisory Committee meeting on July 23-24 could open a new, high-margin revenue stream for LifeMD if certain peptides are added to the approved 503A bulks list.

Improved Patient Economics

Ad

B. Riley emphasized the superior financial metrics associated with insured patients compared to self-pay customers. The firm's analysis indicates that insured patients have approximately 50% lower customer acquisition costs.

Furthermore, these patients demonstrate significantly better engagement, leading to a 10-point-plus retention lift. This dynamic is expected to improve LifeMD's overall unit economics as it expands its base of insured members through programs like the new Medicare bridge.

Strategic Positioning

Beyond immediate catalysts, B. Riley sees LifeMD as well-positioned for long-term trends. The firm anticipates the launch of next-generation GLP-1 drugs from major pharmaceutical companies like Novo Nordisk and Eli Lilly in 2026, which could provide a further tailwind for LifeMD's platform.

The firm also noted that LifeMD's women's health business is scaling effectively and is on track to exit the year with a $20 million annualized revenue run-rate. B. Riley views this segment as representing some of the highest-quality revenue within the company's portfolio.