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On Wednesday, Stephens raised the price target on TruBridge Inc (NASDAQ: TBRG) to $17 from the previous $13, while maintaining an Equal Weight rating on the stock. The adjustment follows the company's third-quarter earnings, which surpassed expectations with more than $20 million in bookings for the fourth consecutive quarter, a year-to-date retention rate of 96%, and revenues slightly above consensus, contributing to significant earnings growth.
The company's updated fiscal year 2024 guidance suggests a return to organic revenue growth and an approximate 200 basis point year-over-year margin expansion, despite some short-term costs incurred for remediation of financial reporting weaknesses. TruBridge's recent performance indicates steady quarter-on-quarter improvements, including in its balance sheet and free cash flow efforts.
The analyst highlighted that the company's outlook for the fiscal year 2025 includes mid- to high-single-digit revenue growth and a target of 20% EBITDA margins by the third or fourth quarter, which is more optimistic than consensus expectations. This positive forecast comes as a result of TruBridge's consistent execution over the past three quarters, demonstrating a favorable trend in the quality of bookings, revenue, and earnings.
The report emphasizes TruBridge's strong quarter, marking it as the third consecutive period of positive execution. The company's strategic progress and financial performance have led to the revised price target, reflecting confidence in its continued growth and operational improvements.
InvestingPro Insights
TruBridge Inc's recent performance and positive outlook are further supported by real-time data and insights from InvestingPro. The company's market capitalization stands at $234.63 million, reflecting its current market valuation. InvestingPro Tips highlight that net income is expected to grow this year, aligning with the company's guidance for fiscal year 2024 and 2025. This projection is reinforced by the fact that 4 analysts have revised their earnings upwards for the upcoming period.
The stock's recent performance has been notably strong, with a 30.41% return over the last month and a significant 82% return over the past six months. This aligns with the analyst's observation of TruBridge's consistent execution and improved financial performance. The stock is currently trading near its 52-week high, with the price at 98.56% of its highest point, indicating strong investor confidence.
However, investors should note that TruBridge is not currently profitable over the last twelve months, with an adjusted operating income of -$4.22 million. Despite this, analysts predict the company will be profitable this year, which corresponds with the company's guidance for margin expansion and revenue growth.
For those seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for TruBridge Inc, providing a deeper understanding of the company's financial health and market position.
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