Is AIDX stock a buy? (December, 2024)

Another acquisition is in the books and Haywood analyst Gianluca Tucci remains bullish on HEALWELL AI (HEALWELL AI Stock Quote, Chart, News, Analysts, Financials TSX:AIDX).

On December 3, AIDX announced that it had acquired 51 per cent of medical tech company Mutuo for $5.5-million in cash and stock.

“We are excited to welcome Mutuo and their remarkable AutoScribe technology to Healwell, CEO Dr. Alexander Dobranowski said. “This acquisition is another step forward in our mission to provide health care professionals with the most advanced AI tools to optimize patient care and ultimately help with the earlier identification and detection of disease. AutoScribe’s unique real-time transcription capabilities, combined with its predictive AI framework, will significantly enhance how clinicians manage patient data, allowing them to focus more on patient-centred care. We look forward to working with Mutuo’s team of talented researchers and medical professionals to further scale this technology.”

Tucci says this acquisition won’t be sitting on the shelf and that AIDX will be looking to monetize it quickly.

“HEALWELL announced the acquisition of a 51% control stake in Mutuo Health for $5.5M. Mutuo is a medical technology company specializing in A.I. powered ambient scribe solutions for clinical documentation whose flagship product, AutoScribe, transcribes clinician-patient dialogue into structured EMR data in real-time using machine learning and natural language processing,” the analyst wrote. “Today, AutoScribe integrates seamlessly with PS Suite, Oscar EMR, Cerner, and Epic, with more to come. Its solution syncs transcriptions directly with an EMR, enhancing efficiency and accuracy, so doctors can focus more on patient care and less on paperwork. We view this control interest acquisition as positive, on strategy, and look for AutoScribe to be integrated with Pentavere’s A.I. technology in the pursuit of identifying high-risk or at-risk patients at the clinic level and in real time. We estimate the acquisition was paid in a combination of cash and stock (~20%/80%) and continue to point to AIDX’s commitment of exiting 2024 at a $100M revenue run rate, implying at least one more M&A announcement prior to year-end, including the possibility of a something transformational. In our view, a transformational deal would not only bring bottom line earnings but new channels for which AIDX can incrementally monetize its A.I. technologies. We estimate Mutuo Health adds ~$1M in revenue and peg the cross-selling upside potential of this technology within the AIDX/WELL ecosystem in the high single digit million range.”

In a research update to clients December 3, Tucci maintained his “Buy” rating and price target of $4.00 on AIDX.

Tucci thinks AIDX will post an Adjusted EBITDA loss of $13.7-million on revenue of $37.8-million in fiscal 2024. He expects those numners will improve to an Adjusted EBITDA loss of $3.3-million on revenue of $73.3-million in fiscal 2025.

“AIDX is well-positioned and capitalized to continue bolting on AI, data science and SaaS/Technology acquisitions, as well as growing organically, in pursuit of being at the forefront of a healthcare revolution driven by artificial intelligence,” the analyst added.

Disclosure: AIDX is an annual sponsor of the Cantech Letter and Nick Waddell owns shares of the company.