Definitive Healthcare Corp T.DH.R

Primary Symbol: DH

Healthcare Medical Devices

Definitive Healthcare Corp. is engaged in transforming data, analytics, and expertise into healthcare commercial intelligence. The Company’s solutions are designed to provide information on healthcare providers and their activities to help its customers optimize everything from product development to go-to-market planning and sales and marketing execution. Its software-as-a-service (SaaS) platform uses deep analytics and data science to help customers develop data-driven strategic decisions, such as finding new markets to enter, building comprehensive go-to-market strategies, accessing tactical information to help target the right decision makers and improving win rates with detailed contextual information. It transforms data into intelligence through artificial intelligence (AI) and machine learning (ML) algorithms that ingest, cleanse, link, and analyze the data to create new intelligence and analytics. All of its business is conducted through AIDH TopCo, LLC (Definitive OpCo).

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Definitive Healthcare Corp

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Post by retiredcfon Apr 28, 2016 8:57am

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Post# 24819292

CIBC

DH Corp.

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Q1 Results: LaserPro Renewals Weigh on 2016

What's The Event

DH reported Q1 results, with profitability well shy of consensus and our Street low. The miss was driven by the (normally stable) US lending division, with lower LaserPro renewals and some one-time items leading to a margin decline of 660 bps year-over-year.

Implications

The miss raises concerns about management visibility into the business, given Q4 commentary on the positive 2016 outlook in the lending and integrated core division. We now expect revenue and margin in the US lending division to be significantly weaker in H1, improving in H2 as contract renewals begin to normalize.

LaserPro overshadowed solid results in other businesses, with GTBS
seeing strong growth (9.2% vs. us at 8%) and Global Payments
Technologies up 19%, with a European customer signing a
payments-as-a-service contract in Q1. The Canadian business was also solid, with 7.7% growth driven by both lending and payments offerings.

What's Changed

We continue to like DH's payments hub offering and see them as well positioned as North America moves towards faster payments.

However, with lower visibility into the US lending business, we are bringing down our US multiple half a turn to 11.5x (US fintech peers at 12x) and adjusting our 2017 US lending estimates (margins to 35% vs. prior 37%). PT to $40 versus prior $44 and we retain our SO rating.