VitalHub wins price target raise at Paradigm Capital

Following a sizeable acquisition, Paradigm Capital analyst Daniel Rosenberg has raised his price target on VitalHub (VitalHub Stock Quote, Chart, News, Analysts, Financials TSX:VHI).

On July 7th, VHI announced it had acquired Kingston-based healthcare software player Novari for $43.6-million.

“We have watched the success of Novari in the Canadian landscape for over a decade, and are honoured to welcome the team to the Vitalhub platform,” CEO Dan Matlow said. “We have solidified our leading position in the Canadian patient flow market, which we believe will be a long-term area of growth in the country’s digitalization journey.”

Rosenberg says this is a continuation of a growth-through-acquisition story that is really working for VitalHub.

“This morning, VitalHub announced that it has acquired Novari, an Ontario-based patient flow software provider, for total consideration of $43.6M,” he wrote. “The news follows the recently completed acquisition of Induction Healthcare Group. These acquisitions add notable revenue to VHI and are expected to become EBITDA accretive with the company’s M&A playbook and integration strategy. We continue to expect a long runway of growth and further M&A.”

In a research update to clients July 7th, Rosenberg maintained his “Buy” rating on VHI and raised his price target from $12.50 to $14.25, implying a return of 25% at the time of publication.

The analyst thinks VHI will post Adjusted EBITDA of $24.4-million on revenue of $105.1-million in fiscal 2025. He expects Adjusted EBITDA of $36.1-million on revenue of $131.8-million in fiscal 2026.

“We value VHI using a 6.0x multiple on our 2026e revenue, resulting in our new $14.25 target price (was $12.50),” Rosenberg added. “We continue to favour the company’s reliable double-digit organic growth and M&A execution. Shares trade at 4.9x 2026e EV/sales compared to peers at 4.2x. Current levels remain attractive for long-term investors to own a highquality steward of capital.”