WELL Health and HEALWELL AI are buys, Stifel says

Stifel analyst Justin Keywood said in an Oct. 9 conference recap that both WELL Health Technologies (WELL Health Stock Quote, Chart, News, Analysts, Financials TSX:WELL) and Healwell AI (Healwell AI Stock Quote, Chart, News, Analysts, Financials TSX:AIDX) remain compelling long-term healthcare technology plays, each positioned to benefit from sector consolidation and ongoing digital transformation across Canada’s strained healthcare system. He reiterated a “Buy” rating and C$9.00 target for WELL, and a “Buy” rating and C$3.80 target for Healwell.

Keywood said he met with management teams from WELL and its group of companies during the Cantech Investment Conference in Toronto, noting that WELL “continues to streamline its structure and focus on core assets,” including an expected U.S. divestiture and spin-out of its software division WELLSTAR, which he said “could unlock significant value.”

He added that Healwell, in which WELL holds about 40% economic interest, is similarly narrowing its focus, including a potential sale of its contract research organization (CRO) unit, while its early investment in xAI “could unearth additional value.”

“Although moving parts remain across WELL’s ecosystem, we see long-term strategic value building, supported by secular tailwinds in Canadian healthcare and validated by recent infrastructure takeouts such as Dentalcorp and Andlauer,” Keywood said.

WELL, with a market capitalization of roughly C$1.5-billion, continues to benefit from its extensive Canadian clinic network and solid organic growth outlook. Recent increases to physician fees and new billing codes for administrative tasks are providing tailwinds, while doctor shortages and aging demographics sustain high demand for services. Keywood noted that WELL’s transformation program aims to lift clinic EBITDA margins from near zero to as high as 18% over 18 months.

WELL is also advancing two U.S. divestitures, one of which could close by year-end, with expected net proceeds of C$50–100-million, which he said should sharpen the company’s Canadian focus and highlight its core healthcare technology and services platform.

Within WELL’s private SaaS platform WELLSTAR, which generates about C$75-million in revenue and 20–25% EBITDA margins, a spin-out via IPO remains possible. WELLSTAR, last valued at C$285-million in December 2024, includes electronic medical record (EMR) software, billing and referral systems, and other digital health tools. Its EMR division holds about 17% of the Canadian market, trailing only Loblaw’s Accuro (31%) and Telus Health (~45%). WELLSTAR is also active in eReferrals, an area with strong growth potential as Canadian healthcare systems replace outdated fax-based processes.

Healwell AI, with a market cap of roughly C$510-million, operates a commercial AI platform for early disease detection and risk prediction, supported by its healthcare software assets such as IntraHealth and Orion. Keywood said Healwell has achieved a turnaround to profitability in its software segment and continues to rationalize its CRO operations.

“We believe a divestment of the CRO business, combined with potential liquidity from its xAI investment, could free up more than $10-million and sharpen focus on core AI-driven healthcare initiatives,” he said.

Keywood maintained that both WELL and Healwell stand to benefit from structural changes within the healthcare system.

“Doctor shortages, capacity constraints and rising costs continue to strain Canada’s healthcare infrastructure,” he said. “WELL’s integrated platform and Healwell’s preventative AI solutions are well-positioned to capture value as the system modernizes.”

Keywood values Healwell at 6× 2026E EV/sales, supporting his C$3.80 target, and bases his C$9.00 WELL target on a discounted cash flow analysis using an 8% WACC and 3% terminal growth rate.

Disclosure: Cantech’s Nick Waddell owns shares of WELL and AIDX and WELL is an annual sponsor of Cantech.

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