HEALWELL AI is undervalued, Clarus says

Clarus Securities analyst George Ulybyshev likes what he sees from HEALWELL AI (HEALWELL AI Stock Quote, Chart, News, Analysts, Financials TSX:AIDX).

In a research update to clients February 27, the analyst launched coverage of AIDX with a “Speculative Buy” rating and price target of $1.50, implying a return of 69 per cent at the time of publication.

The analyst says the company is rolling out high-margin healthcare AI tech that is underpinned by effectiveness and trust.

“The Company’s AI technology has been validated and peer-reviewed through numerous real-world studies in both primary care and hospital settings. We believe this lends HEALWELL credibility within the medical community, which we see as a tremendous competitive advantage,” Ulybyshev said.

The analyst says the company’s unique relationship with healthcare giant WELL Health can unlock significant clinical and commercial value and notes that the former shares the latter’s commitment to grow through acquisition.

“WELL has made a significant commitment to HEALWELL, both financially and operationally, providing the Company access to a large network of patients, healthcare providers, and medical records. We believe this competitive edge will enable HEALWELL to effectively scale its AI technology into a multinational footprint,” he added.

Ulybyshev thinks AIDX will post Adjusted EBITDA of negative $13.5-million on revenue of $20.8-million in fiscal 2024. He expects those numbers will improve to Adjusted EBITDA of negative $9.1-million on a topline of $31.7-million in fiscal 2025.

“Our 12-month target price equates to a blended valuation multiple of 11x 2025e EV/Sales,” he wrote. “Our target valuation multiple takes into account the Company’s competitive positioning, its margin profile, and the growth opportunities that stem from the disruptive nature of the industry in which it operates.”

Disclosure: AIDX and WELL are clients of Cantech Letter and Nick Waddell owns shares of both companies.