WELL Health Technologies Stock Making Waves

Although the COVID-19 Pandemic has had devastating impacts for companies in a multitude of industries, one space that has flourished is that of Telehealth which has seen significant innovation due to the shift toward increased delivery of healthcare online. However, many of the established healthcare companies continue to lag in technological progress, leaving progress to a small group of vanguard companies leading the new wave of Telehealth.

WELL Health Technologies WELL believes that the health industry is ripe for disruption and has committed to innovating and evolving primary health care. They have completed an impressive streak of acquisitions over the past year, and recently made headlines as the first Canadian company offering health records via a secure iPhone App.

On their latest earnings call this week, the company announced they have engaged the law firm Fenwick & West and plans to do a US IPO by September onto the NASDAQ. 
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Thanks to several strategic acquisitions, improved operating efficiencies, and growth in higher-margin software and services revenue, the digital health company recorded its first positive adjusted EBITDA of $0.77 million in Q4 of 2020. WELL is closing in on a $300 million annual revenue run rate and is operating with a positive cash flow of $50 million and zero debt. WELL’s stock has been down more than 10% since the start of 2021, with shares having risen to the $9.00 mark after the acquisition of CRH Medical Group before returning to the mid-$7.00 range. However, the company’s share price is up 385% from a year ago and is set to keep rising, with market analysts ranking the stock as a Buy based on predictions that the stock’s value will climb to the mid-$13.00 range within the next twelve months, a +70% return in a market poised for disruption.

Although in-person clinic appointments remained available throughout 2020 lockdowns, the past year has seen a surge in virtual appointments with the increased adoption and convenience of video calls with family doctors. WELL has capitalized on this shift through rapid expansion of its operations and services. From Q4 of 2020 to Q1 of 2021, WELL achieved a 52% increase in patient visits across all of its platforms through the company’s clinics and acquisitions. Significantly, the company has continued to improve their profitability and cash flow throughout the first months of 2021, providing a solid foundation as WELL seeks to expand across North America.

On April 22nd, WELL closed its largest acquisition thus far of $372.9 million for the gastroenterology clinic company CRH Medical Corp, which is expected to improve WELL’s overall cash flow and enable further access to the U.S. market. CRH achieved $36.8 million in revenue in Q4 of 2020, with an adjusted EBITDA of $16.1 million. On March 7th, WELL also closed a share purchase agreement of $19.25 million for its acquisition of the healthcare software company Intrahealth Systems Limited, which is based out of Vancouver. Intrahealth is a provider of electronic medical records (EMR) and clinical healthware software to 15,000 healthcare professionals across Canada, New Zealand and Australia. Intrahealth has generated $9 million in revenue in the past twelve months with over 20% in EBITDA margin. In light of these recent acquisitions, analysts have forecasted $237 million in revenue for WELL in 2021, with adjusted EBITDA of $40 million. For 2022, they are predicting $343 million in revenue and adjusted EBITDA of $78 million. WELL stock will undoubtedly continue to make waves due to both organic and inorganic growth. The company is set to cement its leadership in the telehealth industry as it expands its operations and services into new markets.

Author Disclaimer: I have no position in WELL