WELL Health Technologies Corp T.WELL

Alternate Symbol(s): WHTCF | T.WELL.DB

Healthcare

WELL Health Technologies Corp. is a practitioner-focused digital healthcare company. The Company develops technologies, services, and support available, which ensures healthcare providers are empowered to positively impact patient outcomes. Its business units include Canadian Patient Services, WELL Health USA Patient Services and SaaS and Technology Services. WELL Health USA Patient and Provider Services includes Primary Circle Medical, Primary WISP, Specialized CRH Medical, and Specialized Provider Staffing. Its healthcare and digital platform includes front and back-office management software applications that help physicians run and secure their practices. Its focused markets include the gastrointestinal market, women's health, primary care and mental health. Its solutions enable 34,000 healthcare providers between the United States and Canada and power owned and operated healthcare’s in Canada with 165 clinics supporting primary care, specialized care and diagnostic services.

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Post by SunsetGrillon Aug 11, 2023 9:30am

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Post# 35583554

Scotia Analysis

Poor poor Butt cox - where was all hIs DD when stock was $2.5 could have made 2.5X

Record Q2 Results

OUR TAKE: Positive. WELL reported Q2 results that were in line on revenues at $170.9M (Street $170M), with adj. EBITDA ahead of consensus at $27.8M (Street $26.4M). Revenue was ahead of us in Patient Services and U.S. Patient Services, but below in SaaS & Tech. Services. Guidance for the year was maintained but is expected to be toward the upper half of the range of $740M to $760M (consensus is at $749M), expecting strong performance across all lines of business continuing into 2H. WELL maintained its view of achieving adj. EBITDA growth of at least 10% y/y. Importantly, the company announced it won a deal for its Ocean eReferral product with the province of B.C. (~$38.5M multi-year contract), which we should add to upside in revenue over the medium term. Shares look attractive trading at ~11.4x 2024 EEBITDA. Call is today at 1 PM ET (416-764-8650). Maintain Sector Outperform.

Revenue of $170.9M was in line vs consensus at $170.0M and us at $170.7M. Patient Services revenue of $54.2M was better than the $51.8M we were expecting. U.S. Patient Services (CRH + Circle Medical + WISP) of $103.5M was ahead of our $101.8M. SaaS and Technology of $13.3M was below our $17.1M, though we note the latter tends to be lumpy and is tough to model (includes Cybersecurity, consulting etc.).
Adj. EBITDA of $27.8M compared with our estimate of $27.5M (ahead of consensus at $26.4M), reflecting a margin of 16.3% vs. 18.8% in the prior-year period. Recall WELL is investing upfront this year in digital advertising initiatives in its U.S.-based Circle Medical and WISP businesses to drive customer growth.
Guidance for 2023 was maintained but is expected to be toward the upper half of the $740M to $760M range; management expects strong performance to continue in 2H across all business units. Adj. EBITDA guidance was maintained (at least 10% y/y growth vs 2022 levels).
WELL achieved a total of 1,015,000 patient visits in Q2, which was up 19% y/y (Canadian Patient Services visits up 12%, U.S. Patient Services visits up 27%). WELL exited Q2 with over 3,200 providers and clinicians representing more than 40% provider growth.

Pertinent Data

Valuation: SOTP based on 2.5x 2024 EV/Sales for Virtual Services and 16.0x 2024 EV/EBITDA for CRH Medical, MyHealth, and Canadian Clinics shareholder EBITDA (implied 18.0x 2024 shareholder EBITDA).
Key Risks: Competition risk, contract risk, staffing risk, reimbursement risk, regulatory risk, integration/execution risk, security risk, liquidity risk.
Rating	Sector Outperform
1-Yr. Target	C$7.50
WELL-T	C$4.40
1-Yr. Return	70.5%
Div. (NTM)	C$0.00
Yield (Curr.)	0.0%
ESG Score	37
Quant Ranking	4