Stan Berenshteyn, an analyst from Wells Fargo, maintained the Buy rating on Health Catalyst (HCAT – Research Report). The associated price target is $14.00.
Stan Berenshteyn has given his Buy rating due to a combination of factors that indicate a promising future for Health Catalyst despite a forecast for slower growth in 2024 compared to 2023. The company’s revised guidance for the year, while initially presenting a less optimistic outlook for revenue growth, is counterbalanced by a stronger sales pipeline and bookings, as well as guidance for margins that surpasses consensus expectations. Berenshteyn highlights an expected improvement in bookings as a key driver, fueled by an uptick in client wins and larger average deal sizes for the company’s Data Operating System (DOS) and delayed Technology-Enabled Mission Support (TEMS) deals that are likely to close. Additionally, management has projected an encouraging improvement in technology and DOS pipeline year-over-year.
Despite a downward adjustment in revenue estimates, Berenshteyn notes an upward revision of the adjusted EBITDA, which reflects a healthier profit margin scenario. Moreover, long-term guidance for the year 2028 suggests significant revenue and adjusted EBITDA milestones that, when coupled with industry-average valuation multiples and discounted back at a reasonable rate, support a target price that aligns with Berenshteyn’s analysis. Other positive factors contributing to the Buy rating include projected improvements in Net Dollar Retention, an acceleration in client growth, and strengthening of the sales pipeline, particularly around DOS-related products. Changes in the executive suite, with new appointments poised to provide strategic direction, further reinforce the analyst’s positive outlook on Health Catalyst’s stock.
In another report released on February 23, Canaccord Genuity also maintained a Buy rating on the stock with a $11.00 price target.
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Health Catalyst (HCAT) Company Description:
Health Catalyst, Inc. engages in the provision of data and analytics technology and services to healthcare organizations. It operates through the Technology, and Professional Services segments. The Technology segment includes its data platform, analytics applications, and support services. The Professional Services segment combines analytics, implementation, strategic advisory, outsource, and improvement services to deliver expertise to its customers. The company was founded by Steven C. Barlow and Thomas D. Burton in 2008 and is headquartered in Salt Lake City, UT.
Read More on HCAT:
- Health Catalyst price target lowered to $15 from $17 at Piper Sandler
- Health Catalyst price target lowered to $11 from $12 at Canaccord
- Health Catalyst Executive Team Undergoes Major Reshuffle
- Health Catalyst sees FY24 revenue $304M-$312M, consensus $324.49M
- Health Catalyst sees Q1 revenue $72.5M-$76.5M, consensus $78.99M
