Keep your eye on OptimizeRx (OptimizeRx Stock Quote, Chart, News, Analysts, Financials NASDAQ:OPRX) because things could get really interesting in 2024, says Roth MKM analyst Richard K. Baldry.
On January 9, OPRX announced that it expected revenue to exceed its previously announced guidance of $68-$70-million.
“Our fourth quarter is expected to show a strong finish to the year, where we were able to post meaningful growth in our core business,” CEO Will Febbo said. “Perhaps most notably, we were able to end the year with 24 DAAP deals, which provides us with a significant revenue launchpad for 2024 and reinforces our confidence in our ability to achieve our 2024 guidance with revenue of at least $110 million and at least 10% adjusted EBITDA margins.”
The analyst said his forecast remains unchanged due to the lack of specific numbers provided, but says make no mistake, this is a company on the upswing.
“We maintain our view that marrying HCP and DTC digital marketing solutions makes sense and should position OPRX as a more important partner to large pharma players which in turn should improve its net retention and allow its ARPU to grow meaningfully,” Baldry argued. “For 2024, OPRX’s expected >$110M in revenue would be a greater than 50% scale increase versus 2023, while its >10% AEBITDA margin target at the low-end ($11M) would represent a 3-4x increase versus dampened 2023 results and at least double 2022’s prior record of $5.5M. These expected breakout results underscore our continued bullish outlook for OPRX in 2024 and beyond.”
In a research update to clients January 10, Baldry maintained his “Buy” rating and 12-month price target of $20.00 on OPRX.
The analyst thinks the company will generate EBITDA of $3.0-million on revenue of $68.2-million in fiscal 2023. He expects those numbers will improve to EBITDA of $11.4-million on a topline of $110.1-million the following year.
“Given an improved outlook for organic growth, OPRX’s shares have traded stronger in the past two months,” the analyst concluded. However, OPRX’s shares remain down 85% versus their 2021 highs and trade at roughly 2.8x our 4Q23 runrate revenues forecast (net of cash and noting it has pre-announced unspecified upside to the 4Q23 revenue forecast), well below our 4.5x SaaS monitored peer average. Further, we have increasing confidence that OPRX’s growth can continue to rebound on the back of its DAAP (RWE-AI) product cycle, and its greater customer visibility once its existing Healthcare Practitioner (HCP) offerings are merged with Medicx’s Directto-Consumer (DTC) offerings to increase its breadth of offerings and revenues per client.”
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