Here's Why Phreesia's Average Revenue Per Client Will Accelerate: Analyst

Growth in Phreesia Inc‘s PHR average revenue per client is poised to accelerate, according to RBC Capital Markets.

The Analyst: Analyst Sean Dodge upgraded the rating for Phreesia from Sector Perform to Outperform. He also raised the price target from $24 to $32.

The Thesis: Historically, new client additions drove Phreesia's growth. The healthcare tech company has "recently realigned its efforts" to focus on monetizing its existing client base, Dodge said in an upgrade note.

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Phreesia's efforts are directed towards an increasingly larger proportion of growth being driven by existing clients, he added.

The company's average revenue per client remained almost flat for two years, the analyst stated.

Throughout the fiscal third quarter, it grew by 3% year-on-year.

This metric could accelerate, he further stated. Why? The company’s Network Solutions is gaining momentum.

Phreesia also benefits from "the cross-selling of several of its newer (but seasoned) provider add-ons." The company also signed new clients with "bigger initial solution bundles.”

PHR Price Action: Shares of Phreesia had risen by 3.3% to $27.84 at the time of publication on Wednesday.

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