WELL Health Technologies (TSE: WELL) owns and operates clinics that deliver healthcare-related services. It operates through the following segments: Clinical services, Digital Services, and Others. It also engages in the Electronic Medical Records business that supports the digitization of clinics.
Record Revenues
WELL Health recently announced that it saw record revenues in May 2022. The increase can be attributed to a 40% increase in total omnichannel patient visits on a year-over-year basis.
In addition, its U.S. segment continues to grow very fast, with $110 million in revenues on an annualized basis for May. This equates to over 150% growth year-over-year, as well as positive adjusted EBITDA.
Furthermore, the company provided an update on the recent CognisantMD acquisition. The platform is growing profitably and supports over 45,000 monthly patient referrals, with 1,800 physicians using the platform for booking while 5,800 physicians use it for secure messaging.
WELL Health reaffirmed its 2022 guidance of revenue of at least $525 million with adjusted EBITDA of almost $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, it might temporarily get worse because the stock will be removed from the S&P/TSX Composite Index.
As a result, the passive ETFs that track this index will be forced to dump their shares in order to comply with their strategy. This could create heavier selling pressure, especially since there is already a lot of negativity in the market.
Nevertheless, it could represent an opportunity for investors with the stomach to handle the current volatility in the market. It will also be interesting to see if company insiders will make additional purchases if the stock continues to sell-off.
There was some insider activity in the past month, which I wrote about in a previous article, but nothing else since then.
Analyst Recommendations
WELL Health Technologies has a Strong Buy consensus rating based on nine Buys assigned in the past three months. The average WELL Health Technologies price target of C$9.53 implies 176.2% upside potential.
Final Thoughts
The company’s share price has been taking a beating for a while now. However, the underlying business continues to grow and generate profits. As a result, WELL may be presenting investors with a very attractive long-term investment.
