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On Wednesday, Phreesia Inc . (NYSE: NYSE:PHR), a healthcare technology company with a market capitalization of $1.48 billion, received a reaffirmation of a Buy rating and a steady price target of $35 from Citi analysts, following the company’s first-quarter fiscal year 2026 performance. According to InvestingPro data, three analysts have recently revised their earnings estimates upward for the upcoming period, suggesting growing confidence in the company’s prospects. Phreesia’s revenue saw a year-over-year increase of 14.5%, aligning closely with the projections set by both the company and consensus estimates. This performance continues the company’s strong growth trajectory, with InvestingPro data showing an impressive five-year revenue CAGR of 27%. This growth was fueled by a robust performance in Subscription and Payments segments, which helped to counterbalance a slight downturn in Network Solutions. The company maintains a healthy gross profit margin of 67.86%.
The Subscription revenue, in particular, experienced a 16% year-over-year growth, surpassing estimates by approximately 3%. This surge was attributed mainly to an unexpected rise in subscription revenue per client, which included a one-time boost of $1 million from non-recurring services revenue. Payments revenue also exceeded expectations, climbing 10.6% year-over-year, which was notably higher than anticipated due to an increase in patient payment volume by 12.7% compared to the previous year.
Adjusted EBITDA saw a significant year-over-year increase of $17 million, topping both the company’s and consensus estimates by $3 million and $4 million, respectively. This growth was attributed to efficiencies in sales and marketing (S&M) and general and administrative (G&A) expenses, which helped to mitigate the impact of a one-time payment processing expense that slightly weakened gross margins.
Furthermore, Phreesia reiterated its guidance for the full fiscal year 2026, including expectations for active healthcare service clients (AHSCs) to reach around 4,500. Additionally, the company raised its adjusted EBITDA forecast from the previously stated range of $78 million to $88 million, to a new range of $85 million to $90 million, marking an increase of $4.5 million at the midpoint. InvestingPro analysis indicates that while the company isn’t currently profitable, analysts expect it to achieve profitability this year. Get access to detailed financial health scores and 6 additional ProTips with an InvestingPro subscription.
The financial results and the subsequent affirmation of the stock rating and price target reflect Phreesia’s solid performance and potential for continued growth within its market segment.
In other recent news, Phreesia Inc. has been the focus of several analyst firms following its fourth-quarter fiscal year 2025 results. Jefferies raised its price target for Phreesia from $28.00 to $32.00, maintaining a Buy rating, citing expected operational leverage and a strategic focus on Network Solutions. KeyBanc Capital Markets also maintained an Overweight rating with a $30.00 price target, highlighting Phreesia’s strong margin improvement and growth potential in the Network Solutions sector. Raymond (NSE:RYMD) James reiterated its Outperform rating with a $30.00 price target, emphasizing Phreesia’s shift towards a free cash flow-oriented approach. DA Davidson maintained a Buy rating with a $36.00 price target, noting the company’s undervaluation compared to its peers and its effective strategy in the U.S. healthcare services sector. These developments reflect continued confidence in Phreesia’s growth prospects and financial performance.
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