Canaccord Adjusts Well Health Estimates, Leaves Ratings Unchanged

Friday, November 13, 2020, 11:23:08 AM

This morning, Canaccord Genuity raised their estimates on WELL Health Technologies (TSX: WELL) off the back of a strong third quarter but kept their 12-month price target and rating at C$8.50 and a speculative buy.

Doug Taylor, Canaccord’s analyst, comments, “We remain positive on WELL Health following Q3 results, which featured a better revenue build than we previously forecasted.” WELL Health reported $12.2 million in revenue compared to the Street estimate of $11 million. They also reported an EBITDA loss of $0.2 million versus the estimate of $0.4 million. Taylor says that this beat was driven by sequential growth in clinic and virtual visits.

Taylor adds, “Increasing our forecasts for better growth and recent M&A.” He cites management saying that their current run rate is $68 million, which includes recent acquisitions. He says, “which we see as providing good support for our current model and expectations.”

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Canaccord increased its revenue estimates for the fourth quarter, 2020, and 2021, along with the estimates for adjusted EBITDA, and EPS. He comments, “We have also increased near-term opex to reflect expectations of additional advertising and promotional activity along with the absorption of INSIG’s operations.”

The firm is now forecasting revenue to be $14.6 million for the fourth quarter, $47.6 million for 2020, and $74.8 million 2021.

Taylor comments on the estimate changes by stating, “Near-term outlook boosted by organic growth and M&A activity.” Clinical volumes continue to grow, and telehealth is holding over their third-quarter levels. The company has also indicated that they could expand their existing clinical business by +40% without hitting any capacity constraints.

Information for this briefing was found via Sedar and Refinitiv. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.