This analyst just raised his price target on Kneat.com

Stifel analyst Justin Keywood raised his target on Kneat.com (Kneat.com Stock Quote, Chart, News, Analysts, Financials TSX:KSI) to $5.75 from $5.50 in a May 14 research report, maintaining a “Buy” rating after an in-line first quarter and the disclosure of a strategic review.

Keywood noted that Kneat is up about 30% since February, when the review was initiated, and said a potential sale would highlight renewed private-market interest in healthcare SaaS.

“We see the strategic review as helping validate the mission-critical nature of Healthcare SaaS and stickiness for niche applications,” Keywood said.

Kneat reported Q1 revenue of $18.0-million, up 22.1% year-over-year and roughly in line with expectations. SaaS and licence revenue rose 19.5% to $16.5-million, while professional services revenue increased 63.3% to $1.5-million. Adjusted EBITDA was $2.7-million, below Keywood’s $3.3-million estimate, mainly because of higher R&D and sales and marketing spending.

ARR was $76.4-million, up 20.3% year-over-year but below Keywood’s $79.3-million estimate. He said the company’s $90-million 2026 exit ARR target remains achievable, with growth typically weighted to the back half of the year.

Keywood said free cash flow missed in Q1, but receivables growth suggests collections should improve in Q2. Kneat ended the quarter with $51.1-million in cash and $31.1-million in net cash.

“Despite uncertainty regarding a potential sale, we contend that the prospect alone and the strong private market interest in KSI showcases the high perceived value of the space,” Keywood said.

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