Echelon Capital Markets initiates coverage and explains why it is bullish on CloudMD Software & Services.
In a July 7 research note, analyst Rob Goff reported that Echelon Capital Markets initiated coverage on CloudMD Software & Services Inc. (DOC:TSX.V; DOCRF:OTCQB; 6PH:FSE) with a Speculative Buy rating and a CA$1.40 per share target price. The healthcare tech firm is currently trading at roughly CA$0.64 per share.
Goff described the Vancouver-based company as having an "integrated model positioned to monetize on telehealth emergence and organic, acquisition-driven growth."
This model consists of a business-to-consumer and business-to-business healthcare platform with numerous components, including telehealth, billing, electronic medical records and more. CloudMD achieves growth in part through acquisitions and partnerships.
Goff explained why CloudMD's platform and the continuing buildout of it make the company an attractive investment opportunity. For one, the COVID-19 pandemic has sped up development of the telehealth industry by about three years, he wrote. Echelon expects an "integrated, in-clinic, online digital model" to slowly replace the traditional model and ultimately become the standard for healthcare delivery.
Telehealth, the core, is expected to surpass $1 billion in patient billings in five years, through support by patients, physicians and regulators.
"We see Amazon's moves toward the healthcare market as endorsement for the sector's demographic growth prospects, a threat to legacy models and a catalyst to consolidate the ecosystem towards larger, vertically integrated providers," commented Goff.
The analyst addressed CloudMD's current undervaluation. He noted that "the company's current enterprise value of $86.1 million "significantly undervalues the economic potential within CloudMD's portfolio and strategy" and does not "reflect the telehealth trajectory."
Also, Goff highlighted that Echelon expects CloudMD's shares to positively rerate as the firm becomes financially sound, which will be driven by a series of potential near-term catalysts.
Those include CloudMD achieving Q4/20 revenue of $7.1 million and an EBITDA of -$0.1 million, booking more than 0.2 million telehealth appointments this year, completing the testing phase of its pharmacy kiosks and moving toward a large deployment of them, and acquiring additional assets.
https://www.streetwisereports.com/article/2020/07/13/analyst-integrated-model-positioned-to-monetize-on-telehealth-emergence.html