HEALWELL AI is set to benefit from a Trump presidency, Haywood says

A Canadian healthcare technology company is poised to benefit from the next four years of American leadership, says one analyst.

Haywood analyst Gianluca Tucci, in a research update to clients November 8, singled out HEALWELL AI (HEALWELL AI Stock Quote, Chart, News, Analysts, Financials TSX:AIDX) as a company that stands to benefit from a second Trump administration. The analyst is convinced enough that this will happen that he has raised his price target on the stock.

“We believe the election of Donald Trump as the 47th President of the USA is a game changer for the advancement of A.I. technologies, including health tech A.I. Trump, who is industry-friendly, has promised to repeal US President Joe Biden’s executive order on A.I., a guideline released last year for developing the technology safely and responsibly,” Tucci wrote. “Trump’s pledge echoes the Republican party’s platform, which says that the executive order “hinders A.I. Innovation”. We believe this policy will fuel A.I.’s growth curve and accelerate capital deployment in the sector, of which AIDX will benefit, in our view. To be succinct, we believe a flurry of innovation will take place over the coming years. Our AIDX target moves higher on an increase in our terminal EV/EBITDA multiple from 30x to 50x.”

Tucci has maintained his “Buy” rating, but raised his price target on AIDX from $2.50 to $4.00, implying a return of 148% at the time of publication.

The analyst 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.

Tucci says the AI revolution he predicts will happen is “generational” in scope.

“There is an A.I. revolution happening and we believe we are in the very early days of the agricultural, industrial and internet revolutions,” he argued. “In all these revolutions, new technologies are developed and there is widespread excitement. Alongside this excitement is pessimism, noise and new entrants. Eventually, the noise will subside and the value will accrue to a handful of winners. There will be significant productivity benefits to society and the world will look back wondering what life was like before the new technology was introduced. As we look forward, we believe AIDX is positioning itself to be a leader in healthcare AI with its core mission to improve healthcare and save lives through early disease detection.”

Disclosure: Nick Waddell is a shareholder of AIDX and the company is a sponsor of Cantech Letter.