WELL Health Reported Record Revenues in May; And after?

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WELL Health Technologies (IS GOOD) owns and operates clinics that provide health care-related services. It operates through the following segments: Clinical Services, Digital Services and Others. It also engages in the electronic medical records sector which supports the digitization of clinics.

Earnings record

WELL Health recently announced record revenue in May 2022. The increase can be attributed to a 40% increase in total omnichannel patient visits on a yearly basis.

Additionally, its US segment continues to grow very rapidly, with revenue of $110 million on an annualized basis for the month of May. This equates to over 150% year-over-year growth, as well as positive adjusted EBITDA.

Additionally, the company provided an update on the recent acquisition of CognisantMD. The platform is growing profitably and supports over 45,000 patient referrals per month, with 1,800 physicians using the platform for booking while 5,800 physicians use it for secure messaging.

WELL Health reaffirmed its 2022 revenue guidance of at least $525 million with an adjusted EBITDA of nearly $100 million.

Potential short-term headwinds

Operationally, the stock continues to fire on all cylinders. However, the share price has been disappointing for investors over the past year. Unfortunately, the situation could temporarily worsen since the stock will be removed from the S&P/TSX Composite Index.

As a result, passive ETFs that track this index will be forced to dump their stocks in order to conform to their strategy. This could create heavier selling pressure, especially since there is already a lot of negativity in the market.

Nonetheless, this could present an opportunity for investors who are brave enough to handle the current market volatility. It will also be interesting to see whether company insiders will make additional purchases if the stock continues to sell.

There has been some insider activity over the past month, which I wrote about in a previous post, but nothing else since.

Analyst Recommendations

WELL Health Technologies has a Strong Buy Consensus Rating based on nine purchases awarded over the past three months. WELL Health Technologies’ average price target of C$9.53 implies 176.2% upside potential.

Final Thoughts

The company’s stock price has been battered for a while now. However, the underlying business continues to grow and generate profits. As a result, WELL can present investors with a very attractive long-term investment.

Disclosure

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