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On Thursday, Evercore ISI analyst Elizabeth Anderson increased the price target for Health Catalyst Inc. (NASDAQ:HCAT) to $5.00, up from $4.00, while keeping the stock’s rating at ’In Line’. The adjustment follows Health Catalyst’s first-quarter performance, which showed a continuation of its business model transition. According to InvestingPro data, analyst consensus remains bullish with targets ranging from $4 to $16, suggesting significant upside potential. The stock, currently trading at $3.97, appears undervalued based on InvestingPro’s Fair Value analysis. The company’s move to expand its Total (EPA:TTEF) Addressable Market (TAM) to more mid-sized customers through the enhanced modularity of its Ignite solution has been highlighted as a key factor in this transition.
Health Catalyst reported a total revenue growth of 6.3% in the quarter, with approximately 4.6% being organic growth. The company’s trailing twelve-month revenue stands at $306.6 million, with a gross profit margin of 46.25%. Despite the company issuing lower guidance for the second quarter, the analyst believes the timing is reasonable and anticipates a revenue growth increase in the second half of 2025. This expected growth, referred to as mid-high single-digit organic (M-HSD org), is projected to alleviate investor concerns about the company’s growth rate and the expected positive turn in EBITDA.
The report released on Thursday evening led to adjustments in Evercore ISI’s estimates, mainly redistributing the figures between the quarters of 2025. The new price target is based on a 10 times multiple of Health Catalyst’s projected EBITDA for 2026. Anderson’s commentary suggests that the first-quarter report from Health Catalyst, released earlier, has provided evidence to support the company’s growth trajectory and has influenced the revised price target. For deeper insights into Health Catalyst’s financial health and growth prospects, including 6 additional ProTips and comprehensive valuation metrics, visit InvestingPro.
In other recent news, Health Catalyst Inc. reported its first-quarter 2025 earnings, revealing an earnings per share (EPS) of $0.01, which significantly surpassed the forecast of $0.0027. The company also reported revenue of $79.41 million, slightly above the expected $79.21 million. Health Catalyst has been proactive in its strategic initiatives, including the launch of its Ignite platform, securing 10 new clients, and expanding partnerships with Microsoft (NASDAQ:MSFT) and Databricks. Additionally, the company strengthened its financial position by paying off $230 million in convertible notes. Health Catalyst expects to add 40 net new platform clients in 2025 and maintains its full-year revenue guidance of $335 million. Analyst discussions highlighted the company’s strategic shift to the Ignite platform, which is seen as a more flexible and cost-effective option compared to its predecessor, DOS. Looking forward, Health Catalyst is focused on technology revenue growth, which is projected to outpace professional services.
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