Two ResponsesThe first one was their earnings assessment followed by reaction to the conference call. GLTA
EPS of 5c beat estimates of 4.8c; revenue of $213.2M beat estimates by 4%. EBITDA of $30.75M beat estimates by 2%. Revenue was a record, up 48%. Canadian operations (clinics and platforms) performed very well. Guidance of sales of $950M+ and EBITDA of $125M+ were both above current estimates. Organic growth was a solid 15%. WELL also announced some cost-cutting measures to be implemented. The stock is down, but we can't really explain why. It was a good quarter, with good growth and a good outlook. Here are some other comments below: WELL Health Technologies' 4Q results continued its streak of beating consensus forecasts for over four years, "aided by strong performances in its Canadian business where Adjusted EBITDA increased 39% y/y in F2023." TD analyst David Kwan says that as well as the strong results, the new revenue guidance for the year which raises targets by 6% to 8% "implies acceleration in growth," compared with 2023. "We believe this strong result should help support a continued rebound in its share price".
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First, on the decline, we would note that the stock rose 39c in the three days prior to the release, so the 10% drop Thursday really only equates to a 4c drop for the week so far. Some investors no doubt got worried about lower margins and growth, but the market 'should' move on expectations and we would have assumed these were in analysts' forecasts already. Guidance was increased and calls for 25% growth but investors seem skeptical this will be achieved for some reason. We like the 15% organic growth. The conference call did not add too much, and management was confident. There was some discussion on a weaker Q1, but this is mostly seasonality, and again, we would have expected analysts/investors to be aware of this seasonality. Nothing in the call gave us any additional concerns. (5iResearch)