LFST Shares Tumbled 20%, Opportunity Or Trap?
LifeStance Health stock has fallen by 20.1% in less than a month, from levels of $5.17 on 6/30/2025 to $4.13 now. Should you buy this dip? Dip buying is a viable strategy for quality stocks that have a history of recovering from dips.
As it turns out, LifeStance Health passes basic quality checks and has returned (median) 7.5% in one year, and 66% as peak return following sharp dips (>30% in 30 days) historically.
That said, if you seek upside with lower volatility than individual stocks, the Trefis High Quality portfolio presents an alternative – having outperformed the S&P 500 and generated returns exceeding 91% since its inception.
Historical Median Returns Post Dips
| Period | Past Median Return |
|---|---|
| 1M | 16.0% |
| 3M | 9.5% |
| 6M | 7.2% |
| 12M | 7.5% |
Historical Dip-Wise Details
LFST had 5 events since 1/1/2020 where the dip threshold of -30% within 30 days was triggered
- 66% median peak return within 1 year of dip event
- 125 days is the median time to peak return after a dip event
- -35% median max drawdown within 1 year of dip event
| 30 Day Dip | LFST Subsequent Performance | |||||||
|---|---|---|---|---|---|---|---|---|
| Date | LFST | SPY | 1Y | Peak Return |
Max Drop |
# Days to Peak |
||
| Median | 7% | 66% | -35% | 125 | ||||
| 6262024 | -33% | 5% | 7% | 70% | 0% | 216 | ||
| 11092022 | -35% | 1% | 10% | 85% | -15% | 231 | ||
| 5062022 | -31% | -9% | 24% | 42% | -36% | 125 | ||
| 1272022 | -31% | -7% | -20% | 66% | -35% | 77 | ||
| 8122021 | -58% | 4% | -30% | 39% | -55% | 29 | ||
LifeStance Health Passes Basic Financial Quality Checks
Revenue growth, profitability, cash flow, and balance sheet strength need to be evaluated to reduce the risk of a dip being the sign of a deteriorating business situation.
| Quality Metrics | Value | Quality Check |
|---|---|---|
| Revenue Growth (LTM) | 16.3% | Pass |
| Revenue Growth (3-Yr Avg) | 20.9% | Pass |
| Operating Cash Flow Margin (LTM) | 9.8% | Pass |
| Leverage (see below) | – | Pass |
| => Interest Coverage Ratio | -0.6 | |
| => Cash To Interest Expense Ratio | 5.7 |
Dip buying, while attractive, needs to be evaluated carefully from multiple angles. Such multi-factor analysis is exactly how we construct Trefis portfolio strategies. If you want upside with a smoother ride than an individual stock, consider the High Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception.