VitalHub has years of outperformance left, Paradigm Capital says

VitalHub’s (VitalHub Stock Quote, Chart, News, Analysts, Financials TSXV:VHI) steady growth, active acquisition strategy, and solid margins have Paradigm Capital’s Daniel Rosenberg sticking to his “Buy” rating and $12.50 target, as the company positions itself for another year of profitable expansion.

In a May 11 research note, Rosenberg said VitalHub is showing strong organic growth through its patient flow software solutions and is evolving into a self-funded consolidator. He described the company’s financial profile as attractive, citing double-digit organic growth, gross margins above 80% and strong secular tailwinds.

He added that recent M&A activity, a robust deal pipeline, and a pristine balance sheet position the company for continued expansion.

“We see several more years of fundamental outperformance, which should translate to share price appreciation,” he said.

VitalHub is a SaaS company tackling poor communication between care providers. The company’s tools offer real-time visibility and coordination across departments and organizations, helping healthcare teams improve resource planning, forecast demand and deliver better patient care.

Rosenberg said VitalHub reported Q1 positive results that aligned with expectations.

“The company continues to demonstrate strong and reliable growth,” he said. “Subsequent to the quarter, VHI announced the acquisition of Induction Healthcare Group, adding notable revenue and further extending the company’s reach in the U.K. Management continues to see a strong pipeline of M&A opportunities. We continue to favour the company’s position in the defensive healthcare software industry and geographic footprint that has limited exposure to recent geopolitical volatility. We have not included the impacts of the Induction acquisition on our estimates as the transaction has yet to close.”

Rosenberg thinks VitalHub will post $25.2-million in Adjusted EBITDA on $89.2-million in revenue for fiscal 2025. He expects those numbers to improve to $30.2-million in Adjusted EBITDA on $99.8-million in revenue in fiscal 2026. These figures reflect slight downward adjustments from previous estimates of $25.3-million and $30.3-million in EBITDA, and $90.2-million and $101.0-million in revenue, respectively.

Rosenberg reiterated his rating and price target, citing strong fundamentals, a healthy M&A pipeline and continued profitable growth.

“We value VHI using a 6.0x multiple on our 2026e revenue, resulting in our $12.50 target price,” he said. “We continue to view VHI as a high-quality compounder of capital and favour its track record on executing accretive acquisitions. With a pristine balance sheet and momentum with its organic sales efforts, we think 2025 is shaping up as another strong year of profitable growth.”

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