HEALWELL AI is still undervalued, Beacon says

Following a corporate update from the company, Beacon Securities analyst Gabriel Leung remains bullish on HEALWELL AI (HEALWELL AI Stock Quote, Chart, News, Analysts, Financials TSX:AIDX).

On January 23, AIDX issued a corporate update, noting that it had raised $29.5-million, completed the acquisition of a majority stake in Pentavere Research Group, and noted that its acquisition pipeline was full of opportunities.

“We live in a world where we know that health care costs are on the rise and burdening the economies of most industrialized and modern medical systems globally in an unsustainable manner,” CEO Dr. Alexander Dobranowski said. “This has ushered in a new era of focus on value-based-care-related trends that are designed to drive down costs, improve efficiency, alleviate provider burnout and improve patient outcomes. One of the most powerful tools being enlisted by health systems globally is to add data-driven clinical decision support systems to EHR platforms to better support providers. The prevalence of AI in health care is now poised to firmly disrupt clinical decision support systems.”

Leung summarized the development.

“HEALWELL provided a corporate update this morning. First, the company indicated that its acquisition pipeline was robust and expanding daily. The company has reviewed over 100 potential opportunities and is currently in discussions with multiple parties,” he wrote. “Target companies include those with mature revenue, strong positive EBITDA and compelling growth opportunities going forward.”

In a research update to clients January 23, Leung maintained his “Speculative Buy” rating and price target of $1.10 on AIDX, implying a return of 47 per cent at the time of publication.

Leung thinks the company will post EBITDA of negative $8.8-million on revenue of $12.7-million in fiscal 2024. He expects those numbers will improve to EBITDA of negative $5.0-million on a topline of $18.1-million the following year.

“Bottom-line, we believe HEALWELL has numerous organic and inorganic initiatives, which should help drive meaningful growth over the next several years,” Leung concluded.

Disclosure: HEALWELL AI is an annual sponsor of Cantech Letter.