Premier’s Unique Position and Strategic Moves Lead to Hold Rating Amid Valuation Uncertainty

Leerink Partners analyst Michael Cherny has maintained their neutral stance on PINC stock, giving a Hold rating on September 3.

Michael Cherny has given his Hold rating due to a combination of factors surrounding Premier’s current market position and potential strategic moves. Although Premier has shown solid performance, it remains unique as the only publicly traded group purchasing organization (GPO), which has led to limited investor interest and uncertainty in valuation approaches. The company is nearing the completion of renegotiating its GPO contracts, which should provide more clarity on its growth trajectory.
Additionally, Premier’s valuation appears reasonable, trading at approximately 9.5-10 times the estimated EV/EBITDA for 2026, suggesting that the stock is not overvalued. The recent news of Premier being in talks for a potential go-private transaction adds another layer of complexity, as it mirrors the path of MedAssets, the only other publicly traded health GPO, which went private in 2016. While there is potential for a favorable market reaction to these developments, Cherny maintains a cautious stance, awaiting more information before adjusting his estimates or valuation framework.