Following recent news from the company, Beacon Securities analyst Gabriel Leung is maintaining his bullish stance on CloudMD (CloudMD Stock Quote, Chart, News, Analysts, Financials TSXV:DOC)
On August 23, CloudMD announced a new contract for remote patient monitoring with what it described as a “major” U.S. hospital system.
“Our team has created and refined a differentiated remote patient monitoring program, and this hospital system contract is a testament to that,” CEO Karen Adams said. “I am proud of the work we have accomplished and the impact we will have on patients using our technology-enabled health care. We will continue to invest in remote patient monitoring and add proprietary technologies such as iCBT and our in-pilot glucose monitoring system. This is foundational for our strategy of U.S. expansion as we continue to build a pipeline of opportunities and innovate to drive health outcomes and evidence-based treatment.”
Leung says he thinks this is a positive, but says he is taking a wait-and-see attitude towards the development.
“We understand this contract will be rolled out over time and has the potential of generating ~US$120 per patient per month to CloudMD (to be reimbursed by CMS), which suggests an addressable opportunity of ~US$36M once fully deployed,” he said. “Beyond the initial RPM services, CloudMD believes that, over time, it could add other proprietary technologies such as iCBT and its Glucose Monitoring System (which is currently in pilot phase).We expect to get more details around this contract as it is rolled out over time. Specifically, we believe the company will begin to offer data points such as patients on-boarded to help provide colour around deployment progress. We understand that the company has additional RPM opportunities in its pipeline, although not to the scale of today’s announcement.At this point, we are not adjusting our estimates pending additional details. However, we do view this as a positive development for the company as it provides another lever for (material) organic growth.”
In a research update to clients August 23,Leung maintained his “Speculative Buy” rating and one-year price target of $0.50 on DOC, implying a return of 317 per cent at the time of publication.
The analyst thinks CloudMD will post Adjusted EBITDA of negative $3.2-million on revenue of $114.4-million in fiscal 2023. He expects those numbers will improve to EBITDA of $2.5-million on a topline of $130.1-million the following year.