TDTheir current target is $8.00 but with this, there's potential for it to be raised. GLTA WELL Health Technologies Corp.
(WELL-T) C$4.21
Q4/F23 First Take: Another Beat and Raise
Event
This morning, WELL released its Q4/F23 results.
Conference call: 12:30 pm ET; 1-888-664-6383.
Impact: POSITIVE
Our take. WELL continued its 4+ year streak of beating consensus expectations, with
another solid quarter aided by strong performances in its Canadian business where
Adjusted EBITDA increased 39% y/y in F2023. As well, the company increased its
F2024 revenue guidance by ~6%-8% and introduced Adjusted EBITDA guidance
that was in-line and implies an acceleration in growth vs. 2023. We believe this strong
result should help support a continued rebound in its share price.
Q4/F23 results beat expectations (again). Q4/F23 revenue was $231.2mm
(TD: $222.5mm/consensus: $218.9mm) and Adjusted EBITDA was $30.8mm (TD:
$29.7mm/consensus: $30.1mm).
Revenue grew 48% y/y and 13% q/q.
Organic growth of 15% in F2023, driven by strong execution across all of its
business units.
Canadian Patient Services revenue of $67.6mm (up 31% y/y).
U.S. Patient Services revenue of $143.5mm (up 55% y/y).
SaaS and Technology Services revenue of $20.2mm (up 60% y/y).
Adjusted EBITDA grew 13% y/y, with Adjusted EBITDA margins declining
to 13.3% from 13.8% last quarter, driven primarily by dilution from recent
acquisitions (e.g., Manitoba Clinic, HEALWELL's Ontario clinics, and a full quarter
of CarePlus).
We estimate the current value of WELL's investment in HEALWELL AI (shares,
convertible debentures, options, warrants) at ~$115mm or >11% of WELL's
market cap. F2024 revenue guidance increased 6-8%; Adjusted EBITDA guidance in-line. For F2024, WELL is now guiding to:
Revenue of $950mm-$970mm (TD: $952mm/consensus: $926mm) vs. >$900mm
previously.
Implies ~22%-25% y/y growth.
Adjusted EBITDA of $125mm-$130mm (TD: $128.4mm/consensus: $127.9mm).
Implies ~10%-15% growth (vs. ~8% in F2023) and ~13.3% Adjusted EBITDA
margins at the mid-point (down from ~14.6% in F2023, due to the dilution from
recent acquisitions, but in-line with Q4/F23 levels).
Management indicated that its previously announced cost optimization plans
(details here), including a staff/management restructuring, has results in
millions of dollars in annualized cost savings.