“Stellar quarter”: WELL Health wins price target raise at Beacon

Its third quarter results sent the share price flying, and now Beacon Securities analyst Gabriel Leung has raised his price target on WELL Health Technologies (WELL Health Technologies Stock Quote, Chart, News, Analysts, Financials TSX:WELL).

On November 7, WELL reported its Q3, 2024 results. The company posted Adjusted EBITDA of $32.7-million on revenue of $251.7-million, a topline that was up 23%, year-over-year.

“Third quarter of 2024 was one of the best quarters in the Company’s history by just about every objective and important metric,” CEO Hamed Shahbazi said. “WELL delivered record quarterly performances for revenue, Adj EBITDA, free cashflow, patient visits and organic growth in the third quarter. We are also pleased to report that we surpassed $1 billion in annualized revenue run-rate, one quarter ahead of our previously stated plan. Record results were driven by our Canadian Patient Services business which delivered robust revenue growth of 35% YoY. Our current pipeline of acquisitions, which includes 17 signed LOIs and definitive agreements pending close, is the strongest we’ve had representing over $100 million in revenues with a heavy emphasis on our Canadian lines of business. As of the end of Q3-2024, WELL proudly supports a network of over 4,000 providers and clinicians delivering care through our physical and virtual clinics. We also continue to evolve and innovate our clinical offerings and are pleased to announce that this past week we launched a new weight care and GLP-1 offering in Canada on our Tia Health virtual care platform. This is just the beginning as we are excited about innovating and delivering superior patient outcomes for Canadians in this category. I am proud to raise our 2024 annual revenue guidance to $985 to $995 million, not including any un-announced acquisitions. As we close out 2024, our focus remains on enhancing profitability as we are projecting a healthy year-over-year increase in free cash flow to shareholders this year. We are a very healthy and growing Company and getting stronger as we are on track to deliver record revenue, Adjusted EBITDA, and Adjusted Net Income for 2024, while boosting cash flow, reducing debt, minimizing net share issuances to the lowest yearly rate ever, and reflecting significant reductions in earnout payments.”

“Overall, we believe this was a stellar quarter with healthy organic growth metrics across the board,” Leung said. “The near-term M&A pipeline also remains full with 17 signed LOIs representing over $100M in revenues. With strong fundamentals and numerous near-term catalysts, we reiterate our Buy rating. We are also increasing our target price to $8.00 (was $7.00), which is based on our sum-of-parts analysis.”

Leung thinks WELL will post EBITDA of $127.8-million on revenue of $989.9-million in fiscal 2024. He expects those numbers will improve to EBITDA of $153.5-million on a topline of $1.09-billion in fiscal 2025.

Disclosure: WELL Health is an annual sponsor of Cantech Letter and Nick Waddell is a shareholder.