Raymond James maintains Strong Buy on Waystar shares, $40 target

On Tuesday, Raymond (NSE:RYMD) James reaffirmed a Strong Buy rating on Waystar Holding (NASDAQ:WAY), maintaining a $40.00 price target for the company’s stock. The endorsement comes after Waystar reported a year-over-year growth trajectory of 18%, which, although slightly lower than the previous quarter’s growth, still exceeded expectations. With a market capitalization of $7.8 billion and strong financial health according to InvestingPro metrics, the company’s performance was particularly noteworthy given the gradual resolution of a competitor’s outages, which had temporarily boosted Waystar’s results.

Waystar’s quarter-over-quarter revenue increase was also highlighted as surpassing management’s projections. Additionally, the company saw a modest rise in its Net Revenue Retention (NRR) to 110%. This metric is critical as it indicates the percentage of recurring revenue retained from existing customers after accounting for downgrades, cancellations, and expansions. While currently unprofitable, InvestingPro analysis shows analysts expect the company to turn profitable this year, with a healthy current ratio of 2.29 indicating strong liquidity.

The initial revenue guidance for 2025 provided by Waystar is optimistic, sitting above analyst expectations. This is seen as an encouraging sign, especially considering the company’s track record of consistently meeting or surpassing its guidance. The analyst’s remarks underscore Waystar’s solid execution throughout the year, despite the challenging comparisons it faced from the previous year.

The report did not indicate any significant movement in Waystar’s stock in early pre-market trading on Tuesday. This suggests that investors are still processing the information and its potential impact on the company’s future performance.

The reaffirmed rating and price target reflect confidence in Waystar’s ability to maintain its growth trajectory and continue delivering strong financial results. The company’s performance indicates resilience and adaptability in a competitive market landscape.

In other recent news, Waystar Holding Corp. has been the subject of several significant developments. The company’s stock has been upgraded by RBC Capital Markets analyst Sean Dodge, who increased the price target to $42 while maintaining an Outperform rating. This is due to Waystar’s potential for maintaining a revenue growth rate of around 10% and a leading EBITDA margin of approximately 40%, according to Dodge.

In addition to this, Waystar has revised its credit agreement with lenders, resulting in a lower interest rate for its term loan and an increased revolving credit facility. This move is expected to reduce borrowing costs and save on interest expenses.

Furthermore, Waystar announced a significant refinancing of its existing debt and an increase in its revolving credit facility. This financial restructuring includes a reduced interest rate and an increase in the maximum borrowing capacity.

On a similar note, Raymond James elevated Waystar stock from Outperform to Strong Buy, setting a price target of $40.00. This is due to Waystar’s potential to sustain double-digit growth, as evident from its recent financial results.

These are among the latest developments for Waystar, highlighting the company’s strong financial position and positive outlook from analysts.

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