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On Friday, KeyBanc Capital Markets reiterated its Overweight rating on Phreesia Inc . (NYSE:PHR), maintaining a price target of $30.00. With the stock currently trading at $25.06 and a market cap of $1.5 billion, KeyBanc’s analyst praised the company’s performance, highlighting another robust quarter with significant margin improvement, particularly in the Network Solutions sector, which is expected to scale further. According to InvestingPro data, the stock has shown significant momentum with a 7.5% return over the past week.
Phreesia Inc. recently demonstrated a substantial margin beat, driven by strong top-line growth and operating leverage. The company achieved impressive revenue growth of 17.8% in the last twelve months, with a healthy gross profit margin of 67.9%. The company’s focus on Network Solutions is seen as a key driver for future growth and margin expansion. Management’s strategy to onboard high ROI provider clients is anticipated to enhance revenue per Automated Health Systems Client (AHSC) and potentially lead to a reevaluation of the company’s market valuation.
The analyst’s positive outlook is supported by the company’s targeted adjusted EBITDA margins of approximately 17% for the current year, which is at the forecast’s midpoint. This margin target reflects the company’s strategic focus and the potential for continued revenue growth through high-margin opportunities.
KeyBanc’s financial projections for Phreesia include an estimated 13.5% growth with approximately 17.5% margins for FY26, followed by an estimated 12.5% growth with around 22% margins for FY27. The analyst believes that these margin expectations could be conservative if the company sustains its current growth trajectory.
The $30 price target set by KeyBanc is based on Phreesia’s shares trading at roughly 4 times the firm’s FY26 revenue estimate and approximately 22.5 times its FY26 adjusted EBITDA estimate. According to InvestingPro analysis, the stock appears slightly undervalued at current levels, with additional ProTips and detailed valuation metrics available to subscribers. The positive assessment reflects confidence in the company’s ability to continue its margin expansion and capitalize on the opportunities presented by its Network Solutions offerings. For comprehensive insights and access to the full Pro Research Report covering Phreesia and 1,400+ other stocks, consider an InvestingPro subscription.
In other recent news, Phreesia Inc. reported its fourth-quarter fiscal year 2025 earnings, surpassing analysts’ expectations with an earnings per share (EPS) of -$0.11 compared to the forecasted -$0.15. The company also exceeded revenue forecasts, reporting $109.7 million, a 15% year-over-year increase. Canaccord Genuity reacted positively by raising its price target for Phreesia to $35.00, emphasizing the company’s durable revenue and improving cash flow profile. DA Davidson maintained a Buy rating with a $36.00 price target, highlighting Phreesia’s undervalued stock and consistent performance. Raymond (NSE:RYMD) James reiterated an Outperform rating with a $30.00 price target, focusing on Phreesia’s strategic shift toward free cash flow and profitability. Phreesia’s adjusted EBITDA reached $36.8 million, marking the first year of positive adjusted EBITDA since FY’21, while free cash flow remained positive for three consecutive quarters. The company continues to focus on revenue growth and strategic acquisitions, with plans to leverage AI for improved workflows and forecasting.
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