On Monday, Piper Sandler showed continued optimism for Health Catalyst Inc. (NASDAQ:HCAT), as the firm increased the price target on the company's stock to $12.00, up from the previous $11.00. The Overweight rating on the stock was reaffirmed, signaling confidence in the company's performance.
The adjustment comes as Piper Sandler updates its model to incorporate the revised calendar year 2024 (CY24) guidance provided by Health Catalyst, which anticipates a robust year-over-year growth of approximately 50% in adjusted EBITDA for calendar year 2025 (CY25).
The analyst's note highlighted several areas of interest that will be topics of discussion during the upcoming meeting with Health Catalyst. These include the company's bookings mix, implementation timelines, trends in segment margins, cross-selling initiatives, and plans concerning the interest expense and upcoming convertible notes due in CY25.
Moreover, the firm is keen to delve into Health Catalyst's recent acquisitions and the dynamics of its remaining performance obligations (RPO) and deferred revenue, which will be addressed at The 36th Annual PSC Healthcare Conference scheduled for December 5, 2024.
The price target increase to $12 is based on an unchanged 15 times multiple of the higher expected adjusted EBITDA for CY25, as per the analyst's report. This valuation reflects a positive outlook on the company's financial health and growth trajectory.
In other recent news, Health Catalyst has been the subject of several significant developments. The healthcare data and analytics company recently disclosed its third-quarter financial results for 2024, indicating a positive profit and loss execution and a revenue mix shifting back towards software. The company's leadership team, including CEO Dan Burton, CFO Jason Alger, and COO Dan LeSueur, expressed a positive outlook for Health Catalyst's growth trajectory and provided financial projections for the remainder of 2024 and the full year of 2025.
In addition to the earnings report, financial services firm Stephens raised the price target for Health Catalyst to $9.00, up from the previous $7.00, while maintaining an Equal Weight rating. This adjustment follows Health Catalyst's third-quarter performance, which included a modest EBITDA beat and an affirmation of its full-year 2024 bookings forecast.
However, Stephens noted that the outcome of the fourth quarter's bookings could affect projections and is awaiting more clarity on Health Catalyst's growth for fiscal year 2025 before adopting a more constructive stance.
InvestingPro Insights
Recent data from InvestingPro adds depth to Piper Sandler's optimistic outlook on Health Catalyst Inc. (NASDAQ:HCAT). The company's market capitalization stands at $518.42 million, with a revenue of $302.06 million over the last twelve months as of Q3 2023. This represents a revenue growth of 4.15% during the same period, aligning with the positive growth trajectory noted by analysts.
InvestingPro Tips highlight that net income is expected to grow this year, and analysts predict the company will be profitable this year. These projections support Piper Sandler's bullish stance and the anticipated 50% year-over-year growth in adjusted EBITDA for CY25. Additionally, the company operates with a moderate level of debt, which could be a point of interest in discussions about interest expenses and upcoming convertible notes.
It's worth noting that Health Catalyst has seen a significant return over the last week, with a 7.97% price total return. This recent performance, coupled with the company's price-to-book ratio of 1.46, suggests that investors are taking notice of the company's potential.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights that could further illuminate Health Catalyst's financial position and growth prospects.
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