Stifel GMP analyst Justin Keywood remains bullish on WELL Health Technologies (WELL Health Technologies Stock Quote, Chart, News, Analysts, Financials TSX:WELL), maintaining a “Buy” rating and target price of $13.50/share for a projected return of 104 per cent in an update to clients on Thursday.
Founded in 2010 and headquartered in Vancouver, WELL Health Technologies owns and operates a portfolio of primary healthcare facilities in Canada and the United States, while also providing digital electronic medical records (EMR) software services and telehealth services, with nearly 30 clinics it operates on its own and over 2,000 clinics in Canada to which it provides software solutions.
Keywood’s latest analysis comes after WELL Health provided a corporate update, outlining a streamlined organizational structure of two business units, Omni-Channel Patient Services & Virtual Services, along with about $70 million in combined free cash flow targets for CRH Medical and MyHealth, its specialty care subsidiary.
“Our thesis on WELL is essentially unchanged, despite the business evolution and substantial growth,” Keywood said. “WELL is seeking to digitize healthcare, an industry that has significantly lagged others in technology adoption. The pandemic has accelerated the use of technology in healthcare, which WELL seeks to capitalize on.”
In his updated analysis, Keywood also made note of the idea that the company could achieve the Rule of 30 through ten per cent organic growth as WELL digitizes operations and cross-sells services along with 20 per cent EBITDA margins.
The company has been aggressive on the merger and acquisition front, with Keywood noting that WELL has executed approximately 30 transactions since 2018. The end result, Keywood said, is a continually evolving ecosystem of healthcare assets including primary care, specialty clinics, a 20 per cent market share in EMR, cybersecurity, CRH, and telehealth, among other areas, with everything working to further extrapolate growth through cross-selling services.
Keywood also noted that the company’s annual run rate now exceeds $400 million in sales with a path towards $100 million in adjusted EBITDA, a significant step forward from the reported $50 million in sales and negative adjusted EBITDA in 2020. In fact, for the upcoming third quarter projections alone, Keywood expects the company to report $88 million in sales for a sixfold year-over-year increase, along with $18 million in adjusted EBITDA for an approximate 20 per cent margin.
“WELL has been working hard to integrate, streamline operations and activate network effects and we are …….
Source: https://www.cantechletter.com/2021/10/well-health-technologies-is-a-double-says-stifel/