Noble initiates on cancer care provider TOI with 'buy', sees triple-digit upside

Shares of The Oncology Institute (TOI), a small-cap medical practice management company specializing in community-based oncology practices, could more than double in the medium term, Noble Capital Markets believes. The company is expanding into new geographies and has flexibility to contract with more insurance plans, it argues. 

In a report, Noble Capital Markets initiated on TOI with an "outperform" rating and a target price of $8 per share, which implies upside of 115% versus current quotes.

Yesterday, July 23, TOI shares closed at $3.71 apiece, up nearly 5% for the day. The gains extended into today, with TOI trading 0.5% higher as of this writing. Meanwhile, the stock has surged 1,100% year to date.  

Noble's valuation is more optimistic than the consensus, according to MarketWatch. The average target price between three coverage analysts is $7.00 per share, for upside of about 89%. 

TOI operates in five states and operates a network of community-based and independent oncology practices. It has developed a proprietary, value-based methodology that helps reduce cost of care, Noble explains.

The company offers both traditional, fee-for-service and value-based oncology care. In the latter, it enters into contracts with third-party payers where the company is paid to treat a specified number of health plan members based on the estimated per-member, per-month cost, which supports cost control. Combining the two schemes provides TOI with the flexibility to contract with more insurance plans, Noble argues.

Its other businesses include selling drugs to patients and conducting clinical trials on behalf of pharmaceutical companies. 

In the first quarter, TOI reported revenue growth of 10.3% year over year to $104.4 million. The guidance for full-year 2025 is between 17% to $460 million at the low end and 22% to $480 million at the high end. 

Further growth will be supported by expansion, including entering new states and territories and acquiring oncology practices, Noble expects. An additional factor cited in favor of TOI is that more patients are surviving cancer longer and require care in the type clinical settings TOI provides.

The AI translation of this story was reviewed by a human editor.