Analyst Stan Berenshteyn from Wells Fargo maintained a Buy rating on Health Catalyst (HCAT – Research Report) and decreased the price target to $13.00 from $14.00.
Stan Berenshteyn has given his Buy rating due to a combination of factors surrounding Health Catalyst’s recent performance and future prospects. He notes that the company’s first quarter results for 2024 were closely aligned with both Wells Fargo Securities and consensus estimates, suggesting a reliable operational forecast. Additionally, the reaffirmed guidance for the full year indicates a steady growth trajectory, with mid-teen growth anticipated in DOS client numbers and a net dollar retention range that reflects both contract wins and incremental revenue escalations. This outlook, coupled with an improving pipeline for new and existing clients, supports expectations of bookings tailwinds and stronger client retention moving forward.
Furthermore, Health Catalyst’s financial management appears prudent, as evidenced by the handling of a client bankruptcy situation, which poses minimal risk to revenue given the client’s small contribution. The company’s strategic adjustments, including the re-timing of a user summit to mitigate weather-related risks and the planned reduction in research and development spend following one-off technology enablement costs, demonstrate proactive cost management. Berenshteyn’s revised price target factors in these considerations, balancing an Enterprise Value to Gross Profit multiple with a Discounted Cash Flow analysis, leading to a valuation that, despite being slightly adjusted, still presents a favorable risk/reward scenario for investors.
In another report released today, Barclays also maintained a Buy rating on the stock with a $14.00 price target.
HCAT’s price has also changed slightly for the past six months – from $6.910 to $6.670, which is a -3.47% drop .
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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.
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