Phreesia: Positioned for Durable Growth and Margin Expansion Amid Market Skepticism

Phreesia (PHR – Research Report), the Healthcare sector company, was revisited by a Wall Street analyst yesterday. Analyst Richard Close from Canaccord Genuity maintained a Buy rating on the stock and has a $35.00 price target.

Richard Close’s rating is based on Phreesia’s ability to maintain durable and profitable growth, as evidenced by their strong adjusted EBITDA and reaffirmed guidance for FY’26. Despite concerns about pharmaceutical marketing budgets and potential delays in purchasing decisions due to funding uncertainties, Close believes these fears are overstated for Phreesia. The company’s Network Solutions segment has shown resilience, with no significant impact from pharmaceutical uncertainties reported by similar companies, DOCS and OPRX, in their recent quarters.
Furthermore, Phreesia’s solutions, which offer tangible savings and improved cash collections, continue to be in demand. Close expects Phreesia to achieve its guidance of more than doubling adjusted EBITDA in FY’26, with a clear path to a 17.4% EBITDA margin at the midpoint of guidance. The market may not fully appreciate the growth and margin potential of Phreesia’s Subscription and Network Solutions segments, supported by Payment Processing, suggesting that the stock has room to rise. Close views Phreesia as a focus stock for 2025 and recommends buying ahead of the upcoming earnings report.

Close covers the Healthcare sector, focusing on stocks such as Clover Health Investments, HealthStream, and Teladoc. According to TipRanks, Close has an average return of 10.2% and a 49.69% success rate on recommended stocks.