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On Tuesday, Cantor Fitzgerald analyst Sarah James increased the price target for TruBridge Inc (NASDAQ:TBRG) shares to $29 from the previous $20, while sustaining an Overweight rating on the stock. The revision reflects the company’s long-term growth potential and updated estimates in line with recent guidance. The stock has demonstrated remarkable performance, with a 178.72% return over the past year. According to InvestingPro data, four analysts have recently revised their earnings estimates upward, with the company expected to achieve profitability this year.
TruBridge, recognized for its strong financial performance and client growth, has been commended for laying a solid foundation in 2024 that is expected to bolster long-term growth. The company’s balance sheet strength, with leverage decreasing to 3x compared to 4x in 2023, and the increase in client acquisition – from 14 in 2022 to 18 in 2023, and up to 24 in 2024 – are seen as key factors in expanding its market presence. With a market capitalization of $448 million and an InvestingPro Financial Health score of "GOOD," the company shows promising fundamentals despite currently trading above its Fair Value.
The analyst’s commentary highlighted the financial health of TruBridge’s clients and the impact of regulatory uncertainties, such as Direct Primary Care (DPP), site neutrality, enhanced subsidies, and Medicaid programs, on client discussions. Although these factors might cause minor delays in some cases, management has not observed any significant changes in timelines, as TruBridge’s offerings are considered valuable for providers navigating a challenging healthcare environment. The company maintains a healthy current ratio of 1.8, demonstrating strong liquidity to manage near-term obligations.
Regarding the contracts delayed in the fourth quarter of 2024, one has already been signed, and the remaining three are anticipated to close in the first half of 2025. The certainty surrounding these contracts is such that they have been factored into the company’s guidance, underscoring the confidence in TruBridge’s growth trajectory.
The upgrade in the price target and the Overweight rating by Cantor Fitzgerald underscore the optimism surrounding TruBridge’s ability to increase its market presence and deliver continued growth amid industry challenges.
In other recent news, TruBridge Inc. reported a mixed performance for the fourth quarter of 2024. The company exceeded revenue expectations, posting $87.36 million against a forecast of $84.35 million, yet missed on earnings per share (EPS), reporting a loss of $0.38 compared to the anticipated $0.0049. Despite this earnings miss, TruBridge’s adjusted EBITDA saw a significant year-over-year increase of 44%, reaching $17.2 million. Analyst Jeff Garro from Stephens adjusted the price target for TruBridge to $28, citing the company’s strong revenue performance and effective cost-cutting strategies, although maintaining an Equal Weight rating on the stock.
TruBridge’s fiscal year 2025 guidance has been positively received, with expectations for revenue growth in the mid-single digits. The company plans to focus on increasing its global workforce support and expanding its SaaS solutions. TruBridge’s CEO, Chris Fowler, emphasized strategic shifts and improvements in financial operations as key drivers for the year. The company aims to achieve revenue between $345 million and $360 million, with adjusted EBITDA projected to be between $59 million and $66 million.
Moreover, TruBridge is addressing challenges such as policy uncertainty and competitive pressures while focusing on client retention. The company has identified 60 key customers up for renewal in the next 24 months, highlighting the importance of maintaining these relationships for future stability. Analyst feedback suggests a cautious yet optimistic outlook, with TruBridge’s cost optimization and global workforce initiatives expected to support profitability and growth in 2025.
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