Common shares of LifeMD, a telehealth company offering virtual primary and specialized care, fell almost 3% in after-hours trading on Tuesday, September 24. This drop followed the announcement that the company will pay dividends to holders of its cumulative preferred shares, which are entitled to previously missed dividends before other types of shares receive payouts.
Details
After gaining 11% during the day, LifeMD common stock declined around 3% in after-hours trading on Tuesday to $5.51 per share. At the end of the main trading session, the company announced dividends of around $0.60 per share for its cumulative perpetual preferred stock, which is traded separately on the Nasdaq. On Tuesday, these preferred shares rose 1% to $22.22 per share.
Cumulative preferred shares differ from common shares in that their holders are prioritized for dividends and entitled to any missed payouts, should the company temporarily suspend dividends for financial reasons. This marks the third dividend LifeMD has issued to its cumulative preferred shareholders this year. A dividend of $0.03 per share was paid to common shareholders for the second quarter, as reported in the second-quarter financials.
About LifeMD
LifeMD offers virtual primary and specialized healthcare services, including weight management and men’s health programs. In September, it announced that it is launching a real-time pharmacy benefit verification program for weight-loss medications. This will allow patients to check their benefits before enrolling in a LifeMD virtual care program, which the company believes will capture more clients.
In addition, LifeMD provides at-home laboratory services and prescription delivery. For the second quarter of 2024, it reported a 41% year-over-year rise in revenue to $50.7 million, with adjusted EBITDA climbing 44% to $2.5 million.
Analyst insights
For the year to date, LifeMD shares are down around 32%. According to MarketWatch, seven analysts cover the stock, and all have buy recommendations. The average target price is $12.57 per share, meaning upside of 121% versus the most recent closing price.
