Definitive Healthcare stock rating cut to Neutral by BTIG

On Thursday, BTIG analysts downgraded shares of Definitive Healthcare Corp (NASDAQ:DH) from Buy to Neutral following the company’s first-quarter earnings report. Despite the company’s revenue and adjusted EBITDA surpassing BTIG and consensus estimates, concerns were raised due to year-over-year declines and ongoing market challenges. According to InvestingPro data, the stock appears undervalued based on its Fair Value analysis, though it has fallen over 30% year-to-date.

Definitive Healthcare reported a first-quarter revenue of $59.2 million, which exceeded BTIG’s estimate of $56.6 million and the consensus estimate of $56.2 million. The adjusted EBITDA for the quarter was $14.7 million, also surpassing BTIG’s and consensus estimates of $10.5 million and $10.7 million, respectively. However, these figures represent a decrease of 6.8% in revenue and a substantial 26.5% drop in adjusted EBITDA compared to the previous year. The company maintains a strong gross profit margin of 83.4% and operates with a moderate level of debt, as highlighted in InvestingPro’s comprehensive analysis, which includes over 10 additional key insights about the company’s financial health.

Although the company raised the lower end of its 2025 revenue guidance by $4 million and reaffirmed its adjusted EBITDA guidance, BTIG expressed disappointment that the guidance increase was not more significant. Definitive Healthcare still anticipates a year-over-year revenue decline for the full year of 2025. Despite current challenges, InvestingPro analysis indicates that net income is expected to grow this year, with analysts predicting a return to profitability. Discover more detailed insights and forecasts in the exclusive Pro Research Report, available for over 1,400 US stocks.

Management noted that customer churn is beginning to stabilize, but the company continues to face significant challenges, including revenue declines and client losses. The competitive landscape was also highlighted, with BTIG mentioning that other players in the market, such as Veeva, IQVIA, and Doximity, are posing strong competition.

The broader bio-pharma market is contending with pricing headwinds, the risk of tariffs, and a more challenging fundraising environment. These factors contribute to the uncertainty surrounding Definitive Healthcare’s revenue growth rebound.

In light of these concerns, BTIG analysts have decided to downgrade the stock to Neutral, citing the year-over-year decline in revenue and EBITDA, a tough market environment, and potential ongoing risks in 2026 and beyond.

In other recent news, Definitive Healthcare reported its Q1 2025 financial results, surpassing its own guidance with revenue reaching $59.2 million. Despite a 7% year-over-year decline, the company achieved an adjusted net income of $7 million, or $0.05 per share, exceeding the high-end of its guidance and analyst expectations. The professional services segment grew by 9%, while subscription revenue saw a 7% decline. The company maintained an adjusted EBITDA margin of 25%, illustrating its commitment to cost control and operational efficiency. For the full year 2025, Definitive Healthcare projects revenue between $234 million and $240 million, representing a 5-7% decline, with an anticipated adjusted EBITDA range of $61 million to $65 million. The company is focusing on improving renewal rates and operational efficiencies despite anticipated revenue declines. CEO Kevin Koop emphasized the company’s strategic focus on differentiated data and customer success as key drivers of its performance. These developments reflect Definitive Healthcare’s ongoing efforts to adapt to market challenges and maintain investor confidence.

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