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Investing.com - Raymond (NSE:RYMD) James raised its price target on VitalHub (VHI:CN) to C$15.00 from C$14.50 while maintaining an Outperform rating.
The Canadian healthcare software company reported strong second-quarter results with 14% organic ARR growth and 25% adjusted EBITDA margins before foreign exchange benefits, beating expectations in most areas except net income due to acquisition and integration costs.
VitalHub completed two of its largest acquisitions to date in June and July, purchasing Induction and Novari, and is now focused on integration activities including cost reduction, process unification, and sales expansion support.
Raymond James expects temporary adjusted EBITDA margin compression in the medium term as VitalHub integrates these acquisitions, with margins projected to return to second-quarter 2025 levels (approximately 25%) by the first quarter of 2026.
The firm believes VitalHub’s expanding footprint and capabilities position it well to capitalize on global healthcare software opportunities, particularly as the UK’s National Health Service implements its digitization-focused 10-year health plan.
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