Stephens raises TruBridge stock price target to $28, maintains rating

On Tuesday, Stephens analyst Jeff Garro revised the price target for TruBridge Inc (NASDAQ:TBRG) upwards to $28 from the previous $23, sustaining an Equal Weight rating on the stock. According to InvestingPro data, four analysts have recently revised their earnings expectations upward for the upcoming period, with price targets ranging from $23 to $32. Garro’s decision follows TruBridge’s strong fourth-quarter performance for the fiscal year 2024, which saw the company exceed revenue expectations by 4%, leading to a significant 24% beat on EBITDA. This success is attributed to the company’s effective offshoring strategies and cost-cutting measures implemented in the third quarter of 2024.

Despite a 40% year-over-year decline in bookings, the analyst noted that the situation is not as dire as it appears, with delayed deals expected to be secured in the first half of 2025. TruBridge’s fiscal year 2025 guidance has been received positively, particularly in terms of profitability, which seems more promising than revenue projections. InvestingPro analysis indicates that net income is expected to grow this year, with the company maintaining a healthy gross profit margin of 49.31%. The guidance is considered achievable if the company continues to focus on client retention and maintains the gross margin benefits derived from offshoring the Financial Health business segment.

The company’s improved financial performance includes a turnaround from the previous year’s losses to a 4% free cash flow margin for fiscal year 2024. This marks a significant recovery for TruBridge, which has delivered an impressive 178.72% return over the past year. InvestingPro data reveals that the stock has also shown strong momentum with a 125.27% return over the last six months, though current valuations suggest the stock is trading above its Fair Value. For deeper insights into TruBridge’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

Garro highlighted the company’s enhanced overall execution throughout fiscal year 2024 but mentioned that Stephens has remained cautious, choosing to stay on the sidelines during the stock’s substantial growth. With the new price target, the firm acknowledges TruBridge’s progress but also indicates a wait-and-see approach for further developments related to client retention, new bookings, and the continuation of successful offshoring before making any further rating changes. The company maintains a solid financial health score of "GOOD" according to InvestingPro metrics, with a current ratio of 1.8 indicating strong liquidity position.

In other recent news, Trubridge Inc. reported its fourth-quarter 2024 financial results, revealing a significant shortfall in earnings per share (EPS), which came in at -$0.38, missing the analyst forecast of $0.0049. Despite this, the company reported a slight revenue beat with $87.36 million, surpassing the expected $84.35 million. The company’s adjusted EBITDA saw a substantial year-over-year increase of 44%, reaching $17.2 million. In terms of analyst activity, no specific upgrades or downgrades were mentioned, but the company has set a revenue guidance range for 2025 between $345 million and $360 million, aiming for mid-single-digit growth. Trubridge is also focusing on expanding its global workforce support and SaaS solutions, with plans to increase its presence in 100 to 400 bed hospitals. The company remains optimistic about its future, despite challenges such as policy uncertainty and competitive pressures. Additionally, Trubridge’s recent acquisition of Bugle, an ambulatory offering, is progressing with the second wave of customer transitions underway.

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