VitalHub price target raised to $13.00 at Eight Capital

Its Q3 results are in the books and Eight Capital analyst Adhir Kadve is more bullish than ever on VitalHub (VitalHub Stock Quote, Chart, News, Analysts, Financials TSX:VHI).

On November 13, VHI reported its Q3, 2024 results. The company posted EBITDA of $3.0-million on revenue of $16.5-million, a topline that was up 25%, year-over-year.

““We are pleased to report strong third quarter 2024 results, continuing our path of driving stable revenue and cash flow growth,” CEO Dan Matlow said. “Financial highlights include $16.5 million of revenue, 28% adjusted EBITDA ⁽²⁾ margin, and $1.1 million of sequential net new organic ARR ⁽¹⁻²⁾ in the seasonally quieter summer quarter. We are continuing to build on the success of our diversified portfolio, from a product and geographic perspective.”

Kadve summarized the quarter.

“VitalHub delivered a positive Q3 print ahead of Street estimates,” he noted. “Subsequent to the quarter, the company closed on its two largest acquisitions pushing our ARR estimate up 56% y/y to exit the year. The balanced growth and profitability thesis remains intact, but management noted intermediary margin pressures into 2025 as these acquisitions are digested. With over $85mm in dry powder, we expect VitalHub to remain active on M&A but at a slower pace as integration efforts take precedence in the short-term.”

In a research update to clients November 14, Kadve maintained his “Buy” rating and raised his price target on VHI from $10.00 to $13.00.

The analyst thinks VHI will post Adjusted EBITDA of $17.4-million on revenue of $67.4-million in fiscal 2024. He expects those numbers to improve to Adjusted EBITDA of $23.2-million on a topline of $85.9-million in fiscal 2025.