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Investing.com - Canaccord Genuity has reiterated its Buy rating and $47.00 price target on Waystar Holding (NASDAQ:WAY) ahead of the company’s second-quarter earnings report, due in 9 days. The analyst consensus ranges from $45 to $51, suggesting significant upside potential from the current price of $36.70.
The stock has pulled back 13.7% from its May 12 post "liberation day" high of $42.55 and declined 10.2% month-to-date in July, while the Russell 2000 index gained 7.1% since May 12 and 3.0% month-to-date. According to InvestingPro’s analysis, the stock appears overvalued at current levels, despite showing strong financial health with an overall score of GREAT.
Canaccord noted that shares remained stable following the July 14 shelf registration filing of 75.7 million shares, which the firm interprets as evidence of investors’ positive long-term outlook on the company.
The research firm cited favorable revenue cycle management trends and high visibility as primary reasons for selecting WAY as a focus stock in 2025, highlighting that 98% of the company’s annual guidance was already under contract at the beginning of the year.
Canaccord also pointed to Waystar’s 40%+ adjusted EBITDA margins, strong Rule of 40 profile, and net revenue retention of 114% exiting the first quarter of 2025 as factors supporting the current valuation and indicating potential for steady long-term growth. The company’s EBITDA reached $318.38 million in the last twelve months, with a healthy gross profit margin of 66.79%.
In other recent news, Waystar Holding Corp. announced a significant 19% revenue growth last year, surpassing its long-term target, primarily driven by new customer contracts. Fitch Ratings upgraded Waystar’s Long-Term Issuer Default Rating to ’BB’ from ’BB-’, citing reduced leverage and strong operating performance characterized by high recurring revenues and solid retention rates. Similarly, S&P Global Ratings improved Waystar’s issuer credit rating to ’BB-’ from ’B+’, reflecting the company’s stronger market position and decreased leverage. Mizuho (NYSE:MFG) initiated coverage on Waystar with an outperform rating and a $48 price target, highlighting expectations for revenue and earnings per share to exceed consensus in the coming years. Additionally, Waystar appointed Aashima Gupta from Google (NASDAQ:GOOGL) Cloud and former 3M executive Michael Roman to its Board of Directors, bringing expertise in AI strategy and healthcare technology. In a move that may indicate a shift in company control, EQT (ST:EQTAB) Partners, Bain Capital, and the Canada Pension Plan Investment Board reduced their combined ownership in Waystar from 52% to 43.9% through a public offering. Waystar also disclosed a proposed public offering of 12.5 million shares by its investors, with no proceeds going to the company itself. These developments reflect Waystar’s ongoing strategic initiatives and market positioning in the healthcare technology sector.
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