On Thursday, JMP Securities updated its outlook on Phreesia Inc . (NYSE: NYSE:PHR), increasing the price target to $30.00 from the previous $28.00, while maintaining a Market Outperform rating for the healthcare technology company.
The firm's optimism towards Phreesia is rooted in several key factors. Firstly, Phreesia's strong market presence is highlighted by its role in facilitating over 150 million visits, accounting for more than 10% of patient visits in the U.S. during the fiscal year 2024. This performance reinforces Phreesia's position as a leading brand in the sector.
Another reason for the positive outlook is Phreesia's pursuit of a significant total addressable market (TAM), estimated at around $10 billion. JMP Securities views the potential increase in competition as a confirmation of the substantial opportunity that Phreesia has been targeting since its inception in 2005.
Moreover, JMP Securities appreciates the company's management team for their attention to financial health and their efforts towards achieving profitability. This strategic focus is reflected in Phreesia's financial projections, with the company nearing a free cash flow breakeven point. According to JMP Securities' model, Phreesia is expected to report a free cash flow of ($1.6 million) at this time, with positive free cash flow anticipated in the second half of the fiscal year 2024.
The analysis suggests that any future capital raises by Phreesia could be a strategic choice by the company rather than a defensive maneuver necessitated by the need to fund ongoing operations.
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