WELL Health Technologies Corp (TSX:WELL, OTCQX:WHTCF) released its third-quarter 2022 financial results that continued to demonstrate the company’s high growth and profitability, writes the analysts at brokerage firm Stifel GMP in a recent research update.
“WELL issued new guidance for 2023 as well to exceed an exit run-rate of $700 million, implying that good growth will continue, of which the company said would be organically driven,” the analysts said.
“Although, volatility remains for the relatively new health-tech sector, WELL continues to demonstrate its business model resilience that is still in a profitable growth mode and unique to most peers,” they added.
READ: Healthcare tech stock climbs on record financial results
Stifel analysts outlined four key areas of its investment thesis:
- WELL continues to add scale as it is anticipated to acquire or build several more clinics to strengthen the foundational platform for higher growth pursuits;
- The company is acquiring tech assets, which is adding valuable software as a service (SaaS) revenue, leading to a platform offering and higher stock multiple. The analyst noted WELL’s M&A pursuit has also become much more valuable with changes in telehealth billing codes, now bridging virtual care technology;
- WELL has exceeded one million patient visits on an annualized run rate basis, either virtually or in-person, which provides a unique situation where new technologies can be developed with rich test data before further expansion and;
- The company can roll out its acquired and developed technologies across Canada and into the US, leading to possible accelerated organic growth. They added that the company can also increase organic growth at its clinics by adding additional doctors to fill extra available capacity that now includes virtual visits.
The analysts have a ‘Buy’ rating and a target price of C$13.50 per share on WELL Health stock, implying more than 300% upside from current levels.
Contact Sean at sean@proactiveinvestors.com