Investing.com -- Shares of Hinge Health Inc (NYSE:HNGE) drew bullish coverage from several brokerages as analysts cited the company’s position as a leading provider of virtual physical therapy and highlighted its expanding market opportunity, improving margins, and adoption of artificial intelligence.
Morgan Stanley (NYSE:MS), RBC Capital Markets, Truist Securities, and Stifel all initiated coverage with buy-equivalent ratings and price targets between $45 and $48, suggesting over 30% upside from recent trading levels.
Analysts pointed to Hinge’s strong revenue growth, its differentiated technology platform, and growing employer and health plan partnerships as key drivers.
Hinge provides digital musculoskeletal (MSK) therapy, an area that analysts say remains underpenetrated despite being a top cost driver for large employers.
The company serves more than 20 million contracted lives and counts major employers including Target (NYSE:TGT) and Google (NASDAQ:GOOGL) among its over 2,300 clients.
Analysts highlighted Hinge’s use of AI, particularly computer vision and generative tools, to personalize treatment and scale operations.
Morgan Stanley noted that automation and platform efficiency have helped lift gross margins from around 55% to above 80% over three years.
Truist said Hinge has posted a 45% compound annual growth rate in billings and 55% in revenue from 2022 to 2024, supported by high retention and expanding clinical programs.
RBC said it sees potential upside from further penetration into Medicare Advantage and international markets.
Risks cited across the notes include a possible slowdown in client adoption or reduced uptake of new offerings.
However, analysts said Hinge compares favorably to digital health and software peers on both growth and valuation metrics.
Hinge recently began trading publicly and is viewed by analysts as a rare example of a digital health company showing durable growth beyond the pandemic period.