DA Davidson maintains Buy on Phreesia stock, target at $34

On Thursday, DA Davidson reiterated its Buy rating on Phreesia Inc . (NYSE: NYSE:PHR) with a consistent price target of $34.00, representing a potential 42% upside from the current price of $23.95. According to InvestingPro data, analysts maintain a strong buy consensus with targets ranging from $28 to $35. The firm acknowledged Phreesia’s sustained improvement in per-client economics, attributing the success to the effective use of all three monetization levers and continued expense discipline.

The firm’s analysis points to a balance between profit growth and certain challenges. Although there was noted softness in the Network Solutions segment, which has previously been a strong growth driver for Phreesia, DA Davidson remains optimistic about the company’s potential for significant profit growth. This confidence is supported by the company’s impressive 17.8% revenue growth over the last twelve months and strong gross profit margin of 67.9%. This confidence is based on Phreesia’s expansion in provider scale and the development of its product suite.

DA Davidson’s valuation of Phreesia reflects an expectation of the company’s future financial performance. The price target of $34.00 is based on an enterprise value that is 23 times the firm’s updated EBITDA estimates. InvestingPro analysis indicates the stock is currently undervalued, with multiple growth catalysts ahead, including expected profitability this year. Get access to detailed valuation models and 12+ additional exclusive ProTips by subscribing to InvestingPro. This valuation is considered by DA Davidson to be reasonable and not demanding, suggesting that the firm sees room for Phreesia’s stock to grow.

The analyst’s comments highlight Phreesia’s ability to maintain profitability while expanding its business. "We are positively disposed towards material profit growth as Phreesia expands its provider scale and product suite," the analyst stated, emphasizing the company’s potential in the market.

Investors and stakeholders in Phreesia Inc. can refer to this reaffirmed rating and price target as a reflection of DA Davidson’s current view on the company’s stock performance and future prospects. The firm’s outlook remains unchanged, suggesting stability in their expectations for Phreesia’s financial trajectory.

In other recent news, Phreesia Inc. reported its first-quarter earnings, showing a 15% increase in revenue year-over-year to $115.9 million, exceeding consensus estimates. The company also reported an impressive adjusted EBITDA of $20.8 million, surpassing expectations by approximately $4 million. Analysts from several firms, including Canaccord Genuity and Citi, adjusted their price targets for Phreesia, with Canaccord lowering its target to $34 while maintaining a Buy rating, and Citi reducing its target to $33, also keeping a Buy rating. Meanwhile, Piper Sandler and JPMorgan both reaffirmed their positive outlooks, with Piper Sandler maintaining an Overweight rating and a $33 price target, and JPMorgan keeping a $30 target with an Overweight rating.

Phreesia’s adjusted EBITDA guidance for the fiscal year was revised upwards to a range of $85 million to $90 million, reflecting strong profitability metrics. The company’s Network Solutions segment reported a 15.5% year-over-year growth, though it fell short of expectations due to campaign timing issues. Despite this, Phreesia’s Subscription and Payments revenue performed well, aided by upselling subscription modules and acquiring larger clients. Raymond (NSE:RYMD) James maintained an Outperform rating with a $30 price target, highlighting the company’s strategic investments and financial discipline as key drivers of its robust financial performance.

Phreesia’s revenue guidance for fiscal year 2026 remains between $472 million and $482 million, indicating a 12-15% growth. The company also experienced a 6% year-over-year increase in revenue per Average Healthcare Service (NASDAQ:HCSG) Client, aligning with its strategic goals. The firm’s ongoing focus on innovation and strategic investments in new technologies were emphasized as significant contributors to its growth and profitability.

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