VHI stock keeps “Buy” rating at Beacon

Following an acquisition, Beacon Securities analyst Gabriel Leung has maintained his “Buy” rating on VitalHub (VitalHub Stock Quote, Chart, News, Analysts, Financials TSX:VHI).

On February 5, VHI reported that it had acquired U.K.-based healthcare scheduling software company BookWise Solutions for £3,115,094.35.

“With this Acquisition, we are excited to expand upon our robust suite of patient flow products while adding 150 customers in both Australia and the United Kingdom. In particular, there are strong synergies with our Intouch with Health platform. BookWise has developed an excellent solution that encompasses the healthcare domain in a unique fashion that we believe can be sold in all of our geographies. We welcome the BookWise team to team VitalHub!” CEO Dan Matlow said.

The analyst gave his take on the development.

“We believe that, based on historical precedent, VitalHub should be able to take BookWise to its operating model relatively quickly,” he wrote. “Overall, we view this acquisition as being a positive one given the potential synergies between BookWise and VitalHub’s Intouch with Health platform, along with VHI’s Australia-based Community Data Solutions division (acquired in October 2022). We also expect this acquisition to be accretive to VHI’s operations (relatively quickly) and still leave the company with close to ~$30M in cash (and no debt).”

In a research update to clients February 5, Leung maintained his “Buy” rating and one-year price target of $6.00 on VitalHub, implying a return of 29 per cent at the time of publication.

Leung thinks VHI will post Adjusted EBITDA of $12.9-million on revenue of $52.5-million in fiscal 2023. He expects those numbers will improve to Adjusted EBITDA of $16.3-million on a topline of $59.8-million in fiscal 2024.