On Tuesday, Waystar Holding Corp. (NASDAQ:WAY) received an Outperform rating as William Blair initiated coverage on the company's stock. The firm provided forecasts for the fiscal years 2024 and 2025, projecting significant growth for Waystar.
For the fiscal year 2024, the firm estimates that Waystar will achieve a total revenue of $885 million. Alongside this, the adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) is expected to reach $351 million. Additionally, the adjusted earnings per share (EPS) are projected to be $0.19.
Looking ahead to fiscal 2025, the revenue forecast climbs to $971 million. The adjusted EBITDA is anticipated to increase to $380 million, with a substantial rise in the adjusted earnings per share to $0.69.
The analyst's commentary accompanying the initiation did not elaborate on the specifics behind the positive outlook but provided clear numerical expectations for the company's financial performance in the next two fiscal years.
Waystar Holding Corp., now under the coverage of William Blair, is set to be closely watched by investors as it strives to meet these projections. The Outperform rating indicates the firm's confidence in Waystar's ability to perform well in the market relative to its peers.
In other recent news, Waystar Holdings has been the recipient of several analyst upgrades. Evercore ISI upgraded the company to an Outperform rating, setting a target price at $25.
They highlighted Waystar's strong operating margins of approximately 40% and a history of greater than 10% organic growth. Similarly, Goldman Sachs initiated coverage on Waystar with a Buy rating and a price target of $32.
They noted the company's distinctive presence in the market and its impressive adjusted EBITDA margins, which exceed 40%. In addition, JPMorgan assigned an Overweight rating to Waystar, pointing out its significant market presence and the stability of its revenue cycle management functions.
They also mentioned that industry growth is expected to contribute to half of Waystar's targeted 10% compound annual growth rate in revenue. These are among the recent developments concerning Waystar, indicating a positive outlook from various financial firms.
InvestingPro Insights
As Waystar Holding Corp. (NASDAQ:WAY) garners an optimistic Outperform rating from William Blair, with expectations of substantial growth in the coming years, the latest metrics from InvestingPro provide a deeper look into the company's financial health. The market capitalization stands at a solid $3.6 billion, reflecting the company's size and investor valuation. Despite the positive outlook, the company is currently trading at a price-to-earnings (P/E) ratio of -64.34, indicating that it is not profitable as of the last twelve months leading up to Q1 2024. This aligns with one of the InvestingPro Tips, which cautions that analysts do not expect the company to be profitable this year.
Additionally, Waystar's revenue growth remains robust, with an increase of 13.98% over the last twelve months as of Q1 2024. This trend is expected to continue, as evidenced by the quarterly revenue growth of 17.64% in Q1 2024. The company's strong gross profit margin of 67.77% also suggests efficient management of production and service costs relative to sales. However, investors should note that the stock is trading near its 52-week high, at 93.16% of this threshold, which is another key point from InvestingPro Tips.
For those looking to delve further into Waystar's financials and future prospects, InvestingPro offers additional tips that can help investors make informed decisions. Use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, and gain access to a comprehensive set of tips, with a total of 6 more InvestingPro Tips available for Waystar.
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