On Tuesday, BTIG began coverage of Definitive Healthcare Corp (NASDAQ: NASDAQ:DH), a company known for its comprehensive data collection and analytics platform, with a Buy rating and a price target of $7.00.
"DH is one of the healthcare industry's most comprehensive data collection and analytics platforms that supports bio-pharma, life sciences, health systems, med-tech, and the broad healthcare eco-system," analysts at BTIG said.
The platform's primary function is to aid in new drug launches and clinical trial efforts, particularly for biopharma and life sciences companies. Definitive Healthcare is adept at gathering and analyzing a wide array of medical data, including information on Skilled Nursing Facilities (SNFs), rare diseases, and specialty drugs, as well as non-traditional retail pharmaceutical data.
Definitive Healthcare also plays a significant role in value-based and risk-based analytics, which are increasingly important to the majority of healthcare payers. These payers range from traditional fee-for-service models to performance-based arrangements. The data provided by Definitive Healthcare is considered highly valuable for devising healthcare strategies across all care segments due to its quality, cleanliness, and comprehensiveness.
BTIG notes the strong financial performance of Definitive Healthcare, highlighting its high margins relative to the healthcare IT (HCIT) sub-sector and its generation of significant free cash flow (FCF). Despite the challenges faced by the stock in the previous years, BTIG is optimistic about the future. The firm cites the resurgence of bio-pharma research and development, improving fundraising efforts for biotech, and the Centers for Medicare & Medicaid Services' (CMS) goal to transition the majority of Medicare members to value-based or risk deals by 2030 as positive indicators for Definitive Healthcare.
BTIG concludes that the consensus expectations for Definitive Healthcare may be conservative and views the stock as undervalued, given the company's financial strengths and the industry's positive trajectory.
In other recent news, Definitive Healthcare Corp. disclosed its Q2 2024 financial results, which exhibited a mixed performance. The company's revenue rose by 5% year-over-year (YoY) to hit $63.7 million, surpassing its own projections. The adjusted EBITDA also outperformed expectations, marking a 21% YoY increase to reach $20.9 million. Despite these positive outcomes, Definitive Healthcare encountered difficulties with customer acquisition and upsell, attributing the underperformance to macroeconomic conditions and sales execution issues.
The company's CEO, Kevin Coop, underscored the necessity for operational improvements and a simplified Go-To-Market approach. Looking forward, Q3 revenue is forecasted to dip by 4% to 7% compared to Q3 2023, and full-year 2024 revenue is predicted to range between $247 million and $251 million.
InvestingPro Insights
As Definitive Healthcare Corp (NASDAQ: DH) garners a Buy rating from BTIG with a forward-looking perspective, InvestingPro data and tips provide additional context for investors considering this stock. The company's aggressive share buyback strategy is a noteworthy indicator of management's confidence in the company's value, aligning with BTIG's positive outlook. This is complemented by a high shareholder yield, which further underscores the potential benefits for investors.
Additionally, analysts predict not only that Definitive Healthcare will be profitable this year, but also that net income is expected to grow, dovetailing with the resurgence of bio-pharma R&D and other industry tailwinds mentioned by BTIG. Although the company has not been profitable over the last twelve months, its liquid assets exceed short-term obligations, suggesting a solid financial position for near-term operations.
From a valuation standpoint, the company's market cap stands at $693.55 million, with a forward P/E ratio for the next twelve months estimated at 37.1. The revenue growth has been positive, with an 8.54% increase over the last twelve months as of Q2 2024, signaling a steady upward trajectory.
For investors interested in deeper analysis, there are additional InvestingPro Tips available, which can be found at https://www.investing.com/pro/DH. These tips offer further insights that could help in making a well-informed investment decision regarding Definitive Healthcare Corp.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.