WELL Health Technologies Corp (TSX:WELL, OTCQX:WHTCF) shareholders could be looking forward to some M&A activity in 2023, analysts at PI Financial believe.
In a note ahead of the health company’s first-quarter 2023 earnings release, PI Financial analysts said they expect WELL to outperform expectations of C$158.9 million and adjusted EBITDA of C$23.9 million for the three-month period to end March 31, 2023.
That would continue a pattern set in 4Q 2022 when Toronto-based WELL reported revenue of C$156.5 million versus PI estimates of C$153.5 million and C$27.2 million in adjusted EBITDA compared to C$25.8 million expected.
The largest clinic owner and operator in Canada saw annual revenue, annual adjusted EBITDA and 4Q revenue all achieve record levels in its most recent earnings report.
Analysts wrote that WELL is “primed to benefit from balance sheet strength and organic growth enabling potential M&A in 2023.”
“WELL's expected strong performance in 2023 is driven by several catalysts including a growing number of public/private partnerships within healthcare, increased federal government funding of healthcare within Canada, and the use of AI-powered tools,” PI Financial analysts wrote.
WELL is guiding between $665 million to $685 million in annual revenue, with 17% to 20% annual growth compared to 2022. EBITDA guidance for FY23 is expected to grow by 10% over 2022, or approximately C$115 million.
“With strong organic growth (notably in 4Q/22) and a robust cash flow profile, management indicated that there are potential M&A opportunities on the horizon,” PI Financial analysts noted. “WELL is expected to have strong performance across all business units and for the company as a whole in 2023.”
PI Financial has a 'Buy' rating and C$7.50 price target on WELL’s TSX-listed stock.
The company is due to report its first quarter earnings on May 12.
Contact Angela at angela@proactiveinvestors.com
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