Is CareRx stock a buy?

In a Nov. 4 update, Leede Financial Markets analyst Douglas Loe maintained his “Buy” rating and $4.75 price target on CareRx (CareRx Stock Quote, Chart, News, Analysts, Financials TSX:CRRX), citing continued EBITDA growth and steady balance sheet metrics as reasons for his positive stance on the Ontario-based long-term care pharmacy operator. The target implies a one-year return of about 36%.

Loe said CareRx’s latest quarterly results extended the company’s consistent upward trajectory in revenue, EBITDA, and margins. He added that the firm’s existing network of fulfillment centres in Ontario, Alberta, and British Columbia continues to deliver organic growth in long-term care beds served, supporting higher operating margins “without any need for supplemental growth capex investment.”

For the quarter ended Sept. 30 (fiscal Q3 2025), CareRx reported revenue of $93.2-million and Adjusted EBITDA of $8.3-million, a 9.0% margin, compared with $92.8-million and $7.8-million (8.4%) in the prior year. Loe said the sequential improvements, though modest, “underscore the company’s operational consistency and scalable platform,” and he expects this upward trajectory to continue through the forecast period.

Loe projects CareRx will generate $369.0-million in revenue and $32.0-million in Adjusted EBITDA in fiscal 2025, rising to $384.3-million and $34.0-million respectively in fiscal 2026. His valuation is based on 10x EV/2026 Adjusted EBITDA, incorporating pro forma cash of $14.8-million and total debt of $44.3-million, adjusted for the company’s dividend and modest share buyback activity during the quarter.

CareRx operates 25 pharmacy fulfillment centres across Canada, serving more than 91,000 long-term care beds. The company expects to add between 6,000 and 8,000 new beds in both 2025 and 2026 through its existing network.

Loe said CareRx is already more than halfway to meeting its 2025 target, even before including a newly onboarded 800-bed contract, and that “EBITDA and margin expansion should continue organically through 2027.”

-30-