WELL Health has a “giant” runway, Paradigm says

It’s gone from zero to a billion in record time but there is plenty more runway for WELL Health Technologies (WELL Health Technologies Stock Quote, Chart, News, Analysts, Financials TSX:WELL).

So says Paradigm Capital analyst Daniel Rosenberg. In a research update to clients February 3, the analyst addressed a corporate update WELL released this morning. In that update, the company noted that it has a pipeline of 165 clinics that represents 440-million in annual revenue. WELL also reported that its Return on Invested Capital (ROIC) from acquisitions is very high and that it has no exposure to tariffs.

“We are very pleased to share these metrics,” CEO Hamed Shahbazi said. “The results clearly show that our clinic ROIC(1) metrics have significantly benefited by our clinic transformation program and consistently delivered strong financial performance. We are now taking steps to significantly increase our pace of growth in 2025 to meet our previously stated future long-term goal of reaching $4 billion in revenues from Canadian sources. We continue to execute on our goals by leveraging our technology and expertise to compress acquisition multiples and improve free cashflow generation reinforcing WELL’s position as a top-tier healthcare services provider and improving the sustainability of the Canadian healthcare ecosystem.”

Rosenberg says WELL’s numbers are still not reflected in its share price.

“While driving ~30% ROIC (defined as adjusted EBITDA incl. transformation costs/total M&A consideration) is impressive, the figure also does not capture the value of incubated technology. Recall, WELL has incubated and grown the third largest EMR in Canada. It has also scaled a portfolio of AI tools and apps, eReferral, telehealth and billings & referral platform. We believe the potential spin-out of the digital platform is not captured in the KPIs.”

The analyst says that the revenue growth has been huge at WELL, the company is barely scratching the surface of its addressable market.

“WELL has a best-in-class M&A model with a giant runway for growth in Canada alone with ~1-2% clinic penetration,” Rosenberg concluded. “The company also has a number of catalysts expected to crystalize value this year. We think investors closely following each of WELL’s operating divisions could be rewarded as the company continues to unlock sum-of-the-parts value.”

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