AIDX’s Orion acquisition is a game-changer, Raymond James says

HEALWELL AI (HEALWELL AI Stock Quote, Chart, News, Analysts, Financials TSX:AIDX) has made an acquisition that will present the company with immediate upsell opportunities.

That’s the opinion of Raymomd James analyst Michael W. Freeman, who in a research update to clients April reiterated his “Outperform 2” rating and price target of $3.00 on AIDX.

On April 1, HEALWELL announced that it had closed the previously announced acquisition of New Zealand-based Orion Health for approximately $200-million (NZ).

“We are thrilled to welcome Orion Health to the Healwell family and are excited at the potential of creating a powerhouse of innovation that will deliver actionable insights and drive better health care outcomes globally,” CEO Dr. Alexander Dobranowski said. “The acquisition of Orion Health represents a transformative milestone for the company, bringing large enterprise customers, recurring revenues, strong operating margins and free cash flow conversion to Healwell while providing a significant new channel for the distribution of our best-in-class AI products. In addition, the acquisition strengthens our position in the public sector, enabling us to deepen our reach with government partners, thanks to Orion Health’s strong, long-standing relationships. With the added synergies from Well Health, we are poised to transform health care through AI and data-driven innovation.”

Freeman says this development is unambiguously positive.

“AIDX’s transformative acquisition of Orion Health closed on schedule this morning, marking what we see as a new era of elevated financial and technological profile for both companies, causing the two to emerge as a singular force in healthcare software and AI for large customers worldwide,” he wrote. “AIDX’s addition of Orion will motivate material top-line growth, immediate company-wide +aEBITDA, and materially expanded international reach. We anticipate material augmentation of Orion’s products by AIDX’s core AI capabilities, potentially driving marked upselling across Orion’s client base, which we view as a key avenue to growth moving forward. Management highlighted that the majority of Orion’s customers are large commercial and government stakeholders looking to deepen the health insights it can yield from its population-scale datasets. AIDX’s AI capabilities, particularly those from Pentavere, have the potential to deliver immediate value-add for these clients given its capacity to quickly structure unstructured health datasets to surface actionable signals and identify gaps in care. We understand AIDX and Orion have a handful of new, collaborative products that, if adopted, would drive material ARR growth with each install.”

Freeman thinks AIDX will post Adjusted EBITDA of $6.0-million on revenue of $137.0-million in fiscal 2025. He expects those numbers will improve to Adjusted EBITDA of $15.0-million on revenue of $192.0-million in fiscal 2026.

Disclosure: Nick Waddell owns shares of AIDX.