Reliq Health has 155 per cent upside, PI says

Following what he describes as a key customer win, PI Financial analyst David Kwan is maintaining his bullish stance on Reliq Health Technologies (Reliq Health Stock Quote, Chart: TSXV:RHT).

This morning, Reliq announced that it had been chosen by Premier Health Group, an owner of primary care clinics that serve more than 100,000 patients, as its exclusive technology partner.

“We are very excited to be selected by Premier Health Group as the exclusive technology partner for their HealthVue Clinics. We look forward to helping HealthVue establish themselves as a technology leader in primary care,” CEO Dr. Lisa Crossley said. “Incorporating Reliq’s technology platform into their clinics will allow HealthVue to improve access to care and convenience for patients, supporting HealthVue’s goal of rapidly increasing their patient numbers and practice revenues. Reliq and HealthVue will share in new practice revenue streams created by the implementation of this technology platform. Expanding our user base into British Columbia with this partnership and into Australia with our recently announced pilots there clearly validates the relevance of our solution in multiple different clinical applications, geographies and healthcare systems.”

Kwan says this is a significant opportunity that provides expandable upside to Reliq.

“This new platform should help HealthVue further grow their patient and revenue base, as they are look to actively grow their business both within Canada and internationally,” the analyst says. “HealthVue is expecting to open a fifth clinic this quarter and Premier Health Group is also reviewing strategic clinic acquisitions and new clinic locations, with two additional opportunities in their pipeline expected to be closed this quarter.”

In a research update to clients today, Kwan maintained his “Buy” rating and one-year price target of $2.60 on Reliq Health, implying a return of 155 per cent at the time of publication.

Kwan believes RHT will generate EBITDA of negative $1.3-million on revenue of $4.8-million on fiscal 2018. He expects those numbers will improve to EBITDA of positive $8.4-million on a topline of $24.3-million the following year.