Haywood launches coverage of HEALWELL AI with a “Buy” rating

Haywood Capital Markets analyst Gianluca Tucci likes what he sees from HEALWELL AI (HEALWELL AI Stock Quote, Chart, News, Analysts, Financials TSX:AIDX).

In a research update to clients October 7, Tucci initiated coverage of AIDX with a “Buy” rating and price target of $2.50, implying a return of 75% at the time of publication.

The analyst says growth-through-acquisition is a key pillar of the company’s business plan.

“In less than one year, AIDX has acquired four companies (Pentavere, Intrahealth, Verosource, Bio Pharma) across AI data science, SaaS/Technology, and trial specialty services, while raising over $50M in gross proceeds through debt and equity. Its proforma revenue run rate is ~$75M and the Company envisions a scenario where it exits 2024 approaching a $100M revenue run rate, implying additional acquisition(s) in the near-term pipeline. AIDX is also targeting a turn to Adj. EBITDA profitability in 2025, with additional EBITDA generating acquisitions.”

Tucci thinks AIDX will post an Adjusted EBITDA loss of $13.0-million on revenue of $40.0-million in fiscal 2024. He expects those numbers will improve to an Adjusted EBITDA loss of $3.5-million on a topline of $74.4-million in fiscal 2025.

The analyst says investors should keep an eye on the following factors, as they could become key business drivers.

“HEALWELL’s primary technology offering is its AI enabled decision support platform which assists healthcare providers in improving early disease diagnosis and preventative health. Clinic information sources for the early disease detection platform include clinician and electronic medical record (EMR) access through strategic partnerships, laboratory and diagnostic information, clinical research, clinical trials and semi-structured data. Additionally, the Company’s Khure AI enabled clinical intelligence technology and Pentavere’s DARWEN AI products are available for commercial use and are generating revenue,” he added.

Disclosure: HEALWELL AI is a client of Cantech and Nick Waddell owns shares of the company.