Wellstar Technologies wins $10.00 target at RBC

RBC Dominion Securities analyst Paul Treiber says Wellstar Technologies (Wellstar Technologies Stock Quote, Chart, News, Analysts, Financials TSXV:WSTR) is positioned to benefit from the digitization of Canadian healthcare.

As reported by the Globe and Mail, Treiber initiated coverage of Wellstar on Oct. 5 with an “Outperform” rating and $10.00 target.

Wellstar began trading on the TSX Venture Exchange on Oct. 1.

Wellstar provides digital health solutions to outpatient healthcare providers across Canada.

Treiber expects average organic revenue growth of 25% from fiscal 2026 to fiscal 2028, driven by cross-selling more modules and AI tools into Wellstar’s EMR (electronic medical record) installed base, rising eReferral volumes through OceanMD and increased outsourcing.

The analyst said AI represents a significant upsell opportunity because adoption of AI tools, eReferrals and outsourcing remains low across Canadian outpatient clinics.

Treiber estimates Wellstar can increase revenue per clinic by up to seven times by upselling its modules and services.

Many of Wellstar’s solutions are EMR-agnostic, which he said gives the company an opportunity to gain share beyond its existing EMR base.

He also sees a long-term consolidation opportunity in Canada’s fragmented healthcare IT market.

Wellstar has deployed $167-million across 24 acquisitions since 2019. Treiber said future acquisitions represent upside to his estimates, with every $50-million of capital deployed potentially adding 12.5% to annual adjusted EPS.

Wellstar has $102-million of pro forma net cash.

Treiber said WELL Health’s ownership stake brings strategic alignment and stewardship. WELL Health holds 54.7% of Wellstar’s economic interest and 82.4% of voting rights.

“Given Well Health’s likely increasing share of the outpatient client market in Canada and focus on maximizing clinic productivity and profitability, we believe Well Health is likely to help accelerate Wellstar’s growth,” he said.

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