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On Thursday, Canaccord Genuity adjusted its outlook on Health Catalyst Inc. (NASDAQ: NASDAQ:HCAT) shares, lowering the price target to $9 from the previous $10, while still endorsing the stock with a Buy rating. The stock, currently trading at $3.97, has experienced significant volatility, with InvestingPro data showing a 52% decline over the past six months. Despite this decline, analysts maintain optimistic targets ranging from $5 to $16 per share. The revision follows the company’s affirmation of its business performance metrics, including the acquisition of 40 new platform clients and a net dollar retention rate of 103%. The firm also reiterated Health Catalyst’s annual guidance.
The research firm highlighted Health Catalyst’s current trading valuation, which stands at 0.9 times its 2026 revenue forecast and 6.6 times its projected adjusted EBITDA for the same year. These metrics suggest that the stock is trading at a deep discount, according to Canaccord Genuity. InvestingPro analysis supports this view, indicating the stock is currently undervalued, with a price-to-book ratio of 0.76 and a moderate debt-to-equity ratio of 1.1. The company maintains a healthy current ratio of 1.43, suggesting adequate liquidity. The firm sees this as an opportunity for investors, given the stock’s value at its current levels.
Canaccord Genuity’s analysis points to the positive growth and margin outlook for Health Catalyst’s Ignite platform, which is expected to see over 50% growth in adjusted EBITDA in 2025. The firm also emphasized the company’s commitment to organic growth, steering clear of dilutive mergers and acquisitions, which is seen as a strategic advantage.
The analyst expressed confidence in the company’s direction, stating, "We view the reiteration of bookings of 40 new platform clients, 103% net dollar retention, annual guidance as favorable. With shares trading at a deeply discounted valuation of 0.9x and 6.6x 2026 revenue and adj-EBITDA, we think HCAT offers value at current levels. This is especially true considering the better growth and margin profile of Ignite, targeted 50%+ growth in 2025 adj-EBITDA, and assurances that the company’s focus is on organic growth as opposed to dilutive M&A. We reiterate our BUY rating on shares of HCAT."
Health Catalyst Inc. is being closely watched by investors as the company navigates its growth trajectory, with Canaccord Genuity maintaining a positive stance on the stock’s future prospects. InvestingPro subscribers can access additional insights through the comprehensive Pro Research Report, which includes detailed analysis of the company’s financial health score of 2.73 (rated as GOOD) and over 30 exclusive ProTips about the company’s potential.
In other recent news, Health Catalyst Inc. reported its first-quarter 2025 earnings, exceeding expectations with an earnings per share of $0.01, surpassing the forecasted $0.0027. The company also reported revenue of $79.41 million, slightly above the $79.21 million forecast. Health Catalyst’s technology revenue grew by 10%, while professional services revenue saw a modest 1% increase. The company maintains its full-year 2025 revenue guidance of $335 million and adjusted EBITDA guidance of $41 million. Additionally, Health Catalyst launched its Ignite platform, securing 10 new clients and expanding strategic partnerships with Microsoft (NASDAQ:MSFT) and Databricks. The company paid off $230 million in convertible notes, strengthening its balance sheet. Evercore ISI analyst Elizabeth Anderson increased the price target for Health Catalyst to $5.00, up from $4.00, while maintaining an ’In Line’ rating. These developments indicate a strategic shift and growth trajectory for Health Catalyst, as evidenced by the recent analyst upgrade and financial performance.
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