Phreesia: Transitioning to Profitable Growth Amid Oversold Valuation and Attractive Risk-Reward

William Blair analyst Ryan Daniels has maintained their bullish stance on PHR stock, giving a Buy rating on January 9.

Ryan Daniels has given his Buy rating due to a combination of factors that highlight a disconnect between Phreesia’s fundamentals and its recent share performance. While the stock has dropped sharply over the past year and sales growth has slowed modestly, he views the market reaction as excessive relative to the actual change in the company’s growth profile. He emphasizes that recent guidance revisions—driven largely by cautious pharmaceutical marketing budgets and a transition to high-single-digit organic growth—do not alter the company’s underlying strategic direction.

Daniels underscores that Phreesia has made a pronounced shift toward profitability, with adjusted EBITDA moving from a substantial loss to a solid positive level over the last three years, demonstrating improving operating leverage and cash generation. He believes this profitability focus, combined with disciplined growth and margin expansion, marks a transition from a pure “build-to-scale” story to a more mature, high-return business model. Given these dynamics and the current valuation, he sees the stock as oversold and argues that the risk-reward profile is particularly attractive, supporting his Buy recommendation.

Daniels covers the Healthcare sector, focusing on stocks such as TransMedics Group, Idexx Laboratories, and Addus Homecare. According to TipRanks, Daniels has an average return of 6.0% and a 46.70% success rate on recommended stocks.

In another report released on January 9, RBC Capital also initiated coverage with a Buy rating on the stock with a $30.00 price target.