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Definitive Healthcare Corp (DH)
NASDAQ:DH
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Definitive Healthcare Corp
(NASDAQ:DH)
Rating:59Neutral
Price Target:
$4.50
▲(9.76%Upside)
Positive Factors
Earnings
Definitive Healthcare outperformed during the key renewal month, showing a better than expected start.
Financial Guidance
Management modestly raised the low end of sales guidance and raised adjusted EPS guidance, reflecting the solid start to the year.
Strategic Initiatives
Definitive is in the early stages of building out a new distribution channel through agency partners, notably signing two leading healthcare advertising agencies in the quarter.
Negative Factors
Customer Churn
Churn continues to be a challenge with a decline in the number of total and enterprise customers, indicating a struggle to maintain client base.
Market Competition
Heightened competition from larger companies with robust data sets, like Veeva and IQVIA, may be contributing to DH's churn and revenue declines.
Revenue Decline
Revenue and adjusted EBITDA declined significantly year-over-year, posing challenges for the company's growth.
Definitive Healthcare Corp (DH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$561.94M
Dividend YieldN/A
Average Volume (3M)646.19K
Price to Earnings (P/E)―
Beta (1Y)1.60
Revenue Growth-3.04%
EPS Growth-152.59%
CountryUS
Employees782
SectorHealthcare
Sector Strength37
IndustryMedical - Healthcare Information Services
Share Statistics
EPS (TTM)0.05
Shares Outstanding107,341,900
10 Day Avg. Volume427,209
30 Day Avg. Volume646,192
Financial Highlights & Ratios
PEG Ratio0.04
Price to Book (P/B)1.40
Price to Sales (P/S)0.00
P/FCF Ratio9.00
Enterprise Value/Market Cap0.89
Enterprise Value/Revenue0.49
Enterprise Value/Gross Profit2.75
Enterprise Value/Ebitda-0.24
Forecast
1Y Price Target
$4.50Price Target Upside9.76% Upside
Rating ConsensusHold
Number of Analyst Covering7
Definitive Healthcare Corp Business Overview & Revenue Model
Company DescriptionDefinitive Healthcare Corp., together with its subsidiaries, provides healthcare commercial intelligence in the United States. Its solutions provide information on healthcare providers and their activities to help its customers in the area ranging from product development to go-to-market planning, and sales and marketing execution. The company's platform offers 16 intelligence modules that cover functional areas, such as sales, marketing, clinical research and product development, strategy, talent acquisition, and physician network management. It serves biopharmaceutical and medical device companies, healthcare information technology companies, and healthcare providers; and other diversified companies comprising staffing and commercial real estate companies, financial institutions, and other organizations in the healthcare ecosystem. Definitive Healthcare Corp. was founded in 2011 and is headquartered in Framingham, Massachusetts.
How the Company Makes MoneyDefinitive Healthcare Corp generates revenue primarily through subscription-based models. Clients subscribe to the company's data analytics platforms, gaining access to extensive healthcare datasets and analytics tools. The company's key revenue streams include subscriptions from healthcare providers, life sciences companies, and other organizations within the healthcare ecosystem that require actionable insights to inform their strategic decisions. Additionally, Definitive Healthcare may engage in partnerships with other businesses to enhance its data offerings and expand its market reach, thus contributing to its revenue growth.
Definitive Healthcare Corp Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: 45.91%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong financial execution and operational improvements, particularly in data integration and strategic partnerships. However, there were notable challenges including a year-over-year revenue decline and pressures in the life sciences segment. The sentiment reflects a cautious optimism as the company works through these challenges while showing signs of stabilization and strategic progress.Q1-2025 Updates
Positive Updates
Exceeded Q1 Financial Guidance
Total revenue for Q1 2025 was $59.2 million, which exceeded the high end of the guidance range, largely due to outperformance in professional services and in-period subscription revenue.
Strong Adjusted EBITDA
Adjusted EBITDA for Q1 was $14.7 million, representing a 25% margin, and was well ahead of expectations.
Operational Improvements
The company has made significant progress in stabilizing renewal rates and achieving strong new logo wins across all end markets.
Successful Data Integration
The company saw strong double-digit growth in customer engagements that integrated Definitive's data with their systems, leading to higher retention rates.
Strategic Partnerships
Expansion of go-to-market reach with healthcare advertising agencies and direct deals, expected to drive momentum in the second half of 2025.
Negative Updates
Year-over-Year Revenue Decline
Total revenue declined 7% year over year, primarily due to lower retention rates.
Pressure on Adjusted Operating Income
Adjusted operating income of $12 million was down 35% from Q1 2024, reflecting revenue pressures.
Consistent Pressure on Net Dollar Retention Rate
Renewal rates remained consistent with the second half of 2024 but were down compared to Q1 2024, impacting net dollar retention rates.
Challenges in Life Sciences
Continued pressures due to the current funding environment, interest rates, and regulatory uncertainty in the life sciences segment.
Company Guidance
During the Q1 2025 earnings call, Definitive Healthcare Corp. provided guidance that exceeded expectations, with total revenue reaching $59.2 million, down 7% year-over-year, but surpassing the high end of their guidance due to strong professional services and in-period subscription revenue. Adjusted EBITDA was significantly above expectations at $14.7 million, representing a 25% margin. The company also reported a 91% conversion from adjusted EBITDA to unlevered free cash flow over the trailing twelve months. Despite lower retention rates, the company observed stabilization in renewal rates and highlighted new logo activity across all end markets. For Q2 2025, they projected revenue between $58.5 and $60 million, with an adjusted EBITDA margin of 25% to 27%. For the full year, they tightened revenue guidance to $234 million to $240 million, aiming for an adjusted EBITDA margin of 26% to 28%. The company remains focused on improving retention, leveraging differentiated data, seamless data integration, and customer success, while navigating macroeconomic uncertainties.Definitive Healthcare Corp Financial Statement Overview
Summary
Definitive Healthcare Corp shows consistent revenue growth, but faces significant profitability challenges with negative net income and deteriorating margins. The balance sheet is stable yet under pressure with declining equity. Strong cash flow generation offsets some profitability issues.Income Statement
Definitive Healthcare Corp shows consistent revenue growth from 2020 to TTM 2025, but faces significant challenges in profitability. The company has experienced deteriorating EBIT and EBITDA margins, with substantial negative net income indicating ongoing operational inefficiencies. Despite gross profit margins being relatively stable, the company struggles with high operational costs negatively affecting net profit margins.40
Negative
Balance Sheet
The company's balance sheet reveals a mixed outlook. The debt-to-equity ratio is relatively moderate, suggesting manageable leverage. However, there is a declining trend in stockholders’ equity and total assets over recent years. The equity ratio has been decreasing, indicating a potential risk in financial stability if the trend continues. Overall, the company's financial structure is stable but facing downward pressure.55
Neutral
Cash Flow
Cash flow analysis is relatively positive with consistent free cash flow generation. The operating cash flow to net income ratio is strong, indicating effective cash generation despite net losses. However, the free cash flow growth rate has been volatile, reflecting potential challenges in sustaining cash flow improvements. Despite this, the company maintains a positive free cash flow to net income ratio.60
Neutral
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 252.20M | 251.41M | 222.65M | 166.15M | 118.32M |
| Gross Profit | 197.47M | 203.93M | 180.03M | 125.47M | 87.85M |
| EBITDA | -567.24M | -241.23M | 23.44M | 23.05M | 44.91M |
| Net Income | -413.12M | -202.39M | -22.25M | -61.26M | -87.65M |
Balance Sheet | |||||
| Total Assets | 1.09B | 1.83B | 2.12B | 2.12B | 1.75B |
| Cash, Cash Equivalents and Short-Term Investments | 290.16M | 308.07M | 331.87M | 387.50M | 24.77M |
| Total Debt | 253.11M | 267.93M | 275.85M | 270.68M | 461.88M |
| Total Liabilities | 482.19M | 626.73M | 633.77M | 612.73M | 549.80M |
| Stockholders Equity | 444.38M | 861.36M | 952.14M | 873.21M | 1.20B |
Cash Flow | |||||
| Free Cash Flow | 45.85M | 38.21M | 27.25M | 18.48M | 21.82M |
| Operating Cash Flow | 58.20M | 41.19M | 35.58M | 25.21M | 23.22M |
| Investing Cash Flow | -26.41M | -31.78M | -248.90M | -46.73M | -23.86M |
| Financing Cash Flow | -56.75M | -25.58M | -26.70M | 384.37M | 16.66M |
Definitive Healthcare Corp Technical Analysis
Positive
4.10
Price Trends
3.70
Positive
3.23
Positive
3.87
Positive
Market Momentum
0.10
Positive
59.12
Neutral
40.10
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DH, the sentiment is Positive. The current price of 4.1 is above the 20-day moving average (MA) of 3.99, above the 50-day MA of 3.70, and above the 200-day MA of 3.87, indicating a bullish trend. The MACD of 0.10 indicates Positive momentum. The RSI at 59.12 is Neutral, neither overbought nor oversold. The STOCH value of 40.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DH.
Definitive Healthcare Corp Risk Analysis
Definitive Healthcare Corp disclosed 74 risk factors in its most recent earnings report. Definitive Healthcare Corp reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Definitive Healthcare Corp Peers Comparison
Overall Rating
UnderperformOutperform
Sector (54)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $1.52B | ― | -15.97% | ― | 16.29% | 66.01% | |
68 Neutral | $1.76B | 66.22 | 4.43% | ― | 4.35% | ― | |
64 Neutral | $1.73B | 36.70 | 6.05% | 3.98% | -17.69% | -10.24% | |
64 Neutral | $812.28M | 42.58 | 5.40% | 0.44% | 3.36% | 7.51% | |
59 Neutral | $561.94M | ― | -86.36% | ― | -3.04% | -152.59% | |
58 Neutral | $1.15B | ― | -10.99% | ― | 10.24% | 2.63% | |
54 Neutral | €4.56B | 17.13 | -48.29% | 2.92% | 15.32% | -7.85% |
* Healthcare Sector Average
Performance Comparison
DH
Definitive Healthcare Corp
4.10
-1.74
-29.79%
HSTM
HealthStream
26.61
-2.41
-8.30%
PINC
Premier
21.11
1.70
8.76%
EVH
Evolent Health
9.77
-11.50
-54.07%
PHR
Phreesia
26.80
2.97
12.46%
GDRX
GoodRx Holdings
4.92
-4.05
-45.15%
Definitive Healthcare Corp Corporate Events
Executive/Board ChangesStock BuybackFinancial Disclosures
Definitive Healthcare Announces CFO Departure and Stock Buyback
Neutral
Nov 7, 2024
Definitive Healthcare has announced key developments including the transition of its CFO, Richard Booth, who will depart in June 2025, and a $100 million stock repurchase program set to commence following a previous $20 million program. The company reported a third-quarter revenue of $62.7 million, exceeding its guidance, despite a net loss due to goodwill impairment. With an eye on future growth, the company is actively assessing market opportunities and strengthening its customer base, evident from recent strategic partnerships and customer acquisitions.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.