RE:WELL - Profitability Required *Update per Q4 release*
Note: These are my opinions and interpretations only. I am a long term holder in WELL. Do your own DD. This is not investment advice.
1) Hit $1 billion revenue by the end of 2024 (Organically)
WELL addressed this: Guided 950-970 million. Per the cc, they should hit 1 billion RR by end of 2024.
2) Become and remain Profitable ASAP. +EPS, no adjusted #'s
WELL is addressing this: per Q4 announcement... see snippets below.
A) "WELL is expecting its strong performance to continue into 2024 with a greater focus on optimizing its operations for organic growth and profitability. WELL's objective is to focus on more capital efficient growth opportunities while effectively managing its costs and delivering strong and sustained cashflow to shareholders."
B) "WELL has implemented a cost optimization program to enhance operational efficiency and profitability."
C) Among other things... "optimization, consolidation of suppliers, and tighter integration of our business units. These initiatives have not only strengthened our operational efficiency but also resulted in millions of dollars of annualized cost savings."
3) Stop all M&A
WELL addressed this: "2024 game plan is that it features less capital allocation and M&A activity and more emphasis on organic growth given the company's growing."
4) Pay down debt
WELL addressed this:
A) "we expect to lower our overall debt levels, leverage ratio and interest costs in 2024."
B) "greater emphasis on capital efficiency such that it can use cashflows from its business to reduce debt and limit share dilution."
I believe Hamed also mentioned debt repayment in the cc along with reduced dilution and potentially massive stock buy backs to return value to shareholders - if I'm not mistaken.
5) Continue with absorption program and winning Gov. contracts.
WELL addressed this: "On February 7, 2024 , the Company created a dedicated public sector focused group to support large scale health systems and care delivery networks that underpin the public sector. The objective of this group is to combine and deliver product offerings that are specifically suited for public sector's unique scale and requirements."
WELL also touched on both these item on the cc saying something to the effect that the absorption program is almost an extension of their recruitment process now. As well as mentioning that they expect to see gov. contract calls coming out soon.
IMO this all sounds great. They've certainly addressed my main concerns. Now, if they can execute on these items like they've executed on their revenue growth, I believe we'll have a winner in our hands. Having said that, they'll need a few quarters to turn the ship to profitability.
As I said before, great company, growing sector, great management, and IMO a balanced approach to revenue, debt, growth, and now profitability. Based on all the above, I'm holding.
BigTT13 wrote: I'll preface this with, I'm long holding 35k shares but imo WELL's next steps should be.
1) Hit $1 billion revenue by the end of 2024 (Organically)
2) Become and remain Profitable ASAP. +EPS, no adjusted #'s
3) Stop all M&A
4) Pay down debt
5) Continue with absorption program and winning Gov. contracts
Profitability, organic growth, + debt repayment for a few years. Get the SP up, debt down. We're at 52 week lows with positive news and it's not moving the stock.
JMO, GLTA