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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WELL Health Technologies Corp

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Post by retiredcfon Jun 19, 2024 9:41am

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Post# 36095715

RBC

Their upside scenario target is $8.50. GLTA

June 18, 2024

Outperform

TSX: WELL; CAD 4.22

Price Target CAD 5.50

WELL Health Technologies Corp.

Investor Day Takeaways: Underscoring the long-term growth opportunity

Our view: WELL held its first analyst/investor day yesterday which provided a very good overview of its key businesses and showcased its investment in HealWell AI, now worth >$1/sh. The opportunity for long-term growth remains impressive and the moat likely created with the help of available AI-supported administrative tools will be difficult to replicate in the short to mid-term, in our view. We reiterate our Outperform rating and continue to believe the market under-appreciates the long-term value creation opportunity in transforming CDN primary/ Dx care by leveraging tech/AI.

Key points:

2024 guidance maintained. WELL reiterated its 2024 revenue guidance of $960-980MM (+24-26% y/y). Our forecast remains $969.2MM with consensus at $970.9MM. The company continues to expect annual adj. EBITDA to be at the “upper-end” of the $125-130MM (+10-15% y/y) guidance range vs. RBCe at $125.9MM and consensus of $127.7M. FCF available to shareholders guidance was also unchanged at more than $55MM vs. RBCe ($59MM). Management underscored that revenue/ patient is now increasing at CRH and that WELL earn-outs are declining materially and should act as a helpful tailwind, especially for 2025 FCF metrics.

Primary care, Dx and SaaS/tech opportunity remains significant. Once again, management called out that a potential 8-10% primary care market share (>$1B in revenue) is possible within a five-year window versus the 1-2% we estimate today ($189MM in 2024 revenue) and noted the gating factor remains internal on-boarding capabilities. CEO, Hamed Shahbazi, highlighted the benefits of various AI tools including Voice, Decision Support and Inbox Administration in accelerating the number of MDs/ clinics approaching the company to be absorbed, noting 2-3/hrs day of administrative time savings and a resultant 20% increase in billings.

Updates on strategic alternatives for Circle Medical and Wisp. The company noted that its strategic review process remains on track for Circle Medical (~58% ownership) and Wisp (~53% ownership) and continues to expect an update by about year-end. News related to Wisp may occur earlier as a payor study is likely required for Circle prior to a sale. Separately, the Circle CEO hopes the business will generate US$1B in sales within 5 years versus ~US$95MM presently. Recall, WELL has options on Circle and Wisp that expire in Q4/24. Under these options, the company has several alternatives including a) call options on the outstanding shares that are currently not owned by WELL, b) a right to take Circle and Wisp public, c) bring in PE players to take minority ownership, d) engineer an outright sale.

Value of HealWell AI position climbs to >$1/sh. It was noted that Well's fully diluted interest in HealWell AI stands at ~94MM shares, or $266MM, representing ~$1.08/sh to a Well shareholder.