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WELL Health Posts 711% Revenue Growth in Q3

WELL Health Technologies Corp (WELL) posted strong growth in revenues in the third quarter of 2021 driven primarily by the acquisitions of CRH and MyHealth.

Revenue & Earnings

The omnichannel digital health company’s revenue for Q3 2021 came in at C$99.3 million, about eight times higher than the revenue of C$12.2 million reported in Q3 2020. CRH generated revenue of C$48.7 million in the third quarter, while MyHealth generated revenue of C$19.2 million. Virtual Services revenue increased 597% to C$18 million in Q3 2021.

Adjusted EBITDA was C$22.3 million in the quarter ended September 30, compared to an adjusted EBITDA loss of C$0.2 million in the prior-year quarter.

The company reported a net loss of C$10.4 million (C$0.06 per share) in the third quarter, compared to a loss of C$14.1 million (C$0.08 per share) in the same quarter a year earlier. (See Insiders’ Hot Stocks on TipRanks)

Growth to Continue in Q4

WELL Health chairman and CEO Hamed Shahbazi said, “We had an outstanding quarter mainly as a result of the growing success of our practitioner enablement platform and strong financial performance from our recent acquisitions. In the third quarter we also achieved adjusted gross profit of C$50.0 million which was almost 10 times the adjusted gross profit as compared to the same period last year. Our adjusted gross margin percentage increased to over 50% for the first time, and we have now accomplished four consecutive quarters of positive Adjusted EBITDA, which has experienced significant growth throughout the year.”

WELL expects to continue growing in the fourth quarter through healthy organic growth in its two business lines, Omnichannel patient services, and Virtual services. The company expects to end the year with annualized revenue approaching C$450 million, and operating adjusted EBITDA of approximately C$100 million.

Wall Street’s Take

Two weeks ago, Stifel Nicolaus analyst Justin Keywood maintained a Buy rating on WELL with a price target of C$13.50. This implies 101.5% upside potential.

Keywood stated, “The pandemic has accelerated the use of technology in healthcare, which WELL seeks to capitalize on. WELL acquires healthcare assets and digitizes operations and cross-sells other acquired technologies. WELL has created a unique and diversified healthcare eco-system, and we now expect a greater focus on driving revenue synergies and organic growth, along with attention to FCF.”

Overall, WELL stock scores a Strong Buy consensus rating based on five Buys. The average WELL Health price target of C$12.59 implies 87.9% upside potential to current levels.

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