WELL Health is an AI leader, Paradigm says

Following the announcement of a government of Canada backed AI initiative, Paradigm Capital analyst Daniel Rosenberg remains bullish on WELL Health Technologies (WELL Health Technologies Stock Quote, Chart, News, Analysts Financials TSX:WELL)

On July 10, WELL announced details of its Health Compass II project, which will receive $15.3-million from the Canadian government to advance the use of AI in healthcare.

“Artificial intelligence presents a transformative opportunity for health care professionals to innovate and enhance patient experiences, and Canada is at the forefront of this pivotal field,” said Francois-Philippe Champagne, Minister of Innovation, Science and Industry. “Our government is proud to champion the Digital Technology Cluster as it collaborates with industry partners, like Well Health, to reshape the delivery of health care services for Canadians.”

The analyst summarized the development.

“WELL is receiving federal support for what it has already been building toward, leading in the commercialization and scale of AI healthcare tools,” he wrote. “We view the latest announcement as a positive endorsement of the value that WELL is providing the healthcare system.”

In a research update to clients July 11, Rosenberg maintained his “Buy” rating and price target of $6.50 on WELL.

The analyst thinks WELL will post Operating Adjusted EBITDA of $128.3-million on revenue of $975.4-millio in fiscal 2024. In fiscal 2025, he expects the company will generate Operating Adjusted EBITDA of $149.7-million on revenue of $1.07-billion.

“WELL is establishing itself as a large provider of tech-enabled healthcare delivery,” he added. “For investors, it is an M&A consolidator, which can drive value within the massive healthcare market that is ripe for digital transformation. Leadership has executed on disciplined, accretive M&A to acquire valuable technology that can scale. Secular changes, accelerated by the pandemic, support WELL’s strategy to leverage technology and drive efficiencies in healthcare, in turn improving patient outcomes and generating shareholder value.”

Disclosure: WELL Health is an annual sponsor of Cantech Letter and Nick Waddell owns the stock.