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Health Catalyst (HCAT)
NASDAQ:HCAT
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Health Catalyst
(NASDAQ:HCAT)
Rating:61Neutral
Price Target:
$4.00
▲(4.99%Upside)
Positive Factors
Client Growth
The selling season is progressing well with expectations to add more platform clients, indicating growth potential.
Financial Performance
Health Catalyst reported revenue and adjusted EBITDA that exceeded consensus estimates, showing strong financial performance.
Platform Innovation
The new Ignite platform looks to be an attractive purchase with its lower price point and flexibility that shortens sales cycles and implementation times.
Negative Factors
Implementation Delays
There were delays in Professional Services revenue, particularly with Health Information Exchange clients.
Market Challenges
The Budget Reconciliation Bill may reduce the total number of insured lives in the U.S., impacting Medicaid enrollment and causing challenges for HCAT.
Revenue Growth Concerns
HCAT's revenue growth has been slowing from 37%+ y/y in 2018 and 2019 to just 4% y/y growth in 2024, raising concerns about the company's growth prospects.
Health Catalyst (HCAT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$265.18M
Dividend YieldN/A
Average Volume (3M)589.22K
Price to Earnings (P/E)―
Beta (1Y)1.45
Revenue Growth4.88%
EPS Growth37.87%
CountryUS
Employees1,500
SectorHealthcare
Sector Strength44
IndustryMedical - Healthcare Information Services
Share Statistics
EPS (TTM)0.01
Shares Outstanding69,601,234
10 Day Avg. Volume674,333
30 Day Avg. Volume589,218
Financial Highlights & Ratios
PEG Ratio0.20
Price to Book (P/B)1.34
Price to Sales (P/S)0.00
P/FCF Ratio-10.84
Enterprise Value/Market Cap2.65
Enterprise Value/Revenue0.58
Enterprise Value/Gross Profit5.39
Enterprise Value/Ebitda-6.42
Forecast
1Y Price Target
$8.13Price Target Upside113.39% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
Health Catalyst Business Overview & Revenue Model
Company DescriptionHealth Catalyst (HCAT) is a leading provider of data and analytics technology and services to healthcare organizations. The company operates within the healthcare and technology sectors, offering a comprehensive suite of software applications and professional services designed to help improve clinical, financial, and operational outcomes. Its core products include a cloud-based data platform that aggregates and organizes healthcare data, as well as analytics applications that enable healthcare providers to derive actionable insights and make data-driven decisions.
How the Company Makes MoneyHealth Catalyst makes money primarily through the licensing of its software platform and analytics applications to healthcare organizations, including hospitals, health systems, and clinics. The company employs a subscription-based revenue model, where clients pay recurring fees for access to its technology and services. Key revenue streams include software subscriptions, professional services such as implementation and consulting, and maintenance and support contracts. Additionally, Health Catalyst may engage in strategic partnerships with other healthcare technology firms to expand its offerings and customer base, further contributing to its revenue growth.
Health Catalyst Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: -4.03%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
The call presented a positive outlook with strong financial performance and successful Ignite platform adoption. However, there were challenges in Professional Services revenue and macroeconomic uncertainties that could affect future performance.Q1-2025 Updates
Positive Updates
Strong Financial Performance
Total revenue for Q1 2025 was $79.4 million, with adjusted EBITDA of $6.3 million, both above recent guidance. Technology revenue grew by 10% year-over-year.
Successful Ignite Platform Launch
Added 10 net new platform clients in Q1 2025, with significant cross-sell success from existing app clients, indicating a strong start for the Ignite platform.
Improved Client Engagement
Secured new wins, such as with a Midwest Health Information Exchange client and Canopy Cancer Collective, showcasing the growing value of an integrated portfolio.
Partnerships and Market Expansion
Strengthened partnerships with Databricks and Microsoft, with certain Ignite modules now transactable on the Microsoft Azure marketplace.
Positive Client Outcomes
Lifepoint Health reported significant improvements using Ignite, including 650 lives saved and 1,200 fewer blood transfusions.
Negative Updates
Professional Services Revenue Challenges
Professional Services revenue was up only 1% year-over-year. There were implementation delays with Health Information Exchange clients affecting revenue timing.
Macroeconomic Uncertainties
Potential Medicaid and research funding reductions could delay client decisions, impacting revenue and dollar-based retention rate performance.
Tech Segment Gross Margin Pressure
Q1 2025 adjusted Technology gross margin decreased by approximately 120 basis points year-over-year.
Company Guidance
During the call, Health Catalyst provided guidance with several key metrics for the fiscal year 2025, highlighting a strong start with a total revenue of $79.4 million and an adjusted EBITDA of $6.3 million for the first quarter, both exceeding previous guidance. The company aims to achieve full-year total revenue of approximately $335 million, with technology revenue projected at $220 million and adjusted EBITDA expected to reach $41 million. Health Catalyst is targeting around 40 net new platform clients for the year, with 10 already added in the first quarter. The CEO emphasized the strategic shift to the Ignite platform, which boasts a 70% gross margin compared to 60% for the legacy DOS platform. Ignite's flexibility and lower entry price facilitate faster sales cycles, with the company anticipating completing two-thirds of client migrations to Ignite by the end of 2025. Additionally, Health Catalyst expects a dollar-based retention rate of approximately 103% for 2025, reflecting confidence in client retention and expansion strategies.Health Catalyst Financial Statement Overview
Summary
Health Catalyst shows revenue growth, indicating strong market demand. However, the company struggles with profitability and cash flow generation. The balance sheet reflects a moderate debt-to-equity ratio, but high net debt poses risks if cash flows do not improve.Income Statement
Health Catalyst has shown consistent revenue growth, with a revenue increase from $306.58 million to $311.27 million in the TTM. However, profitability remains a challenge, with negative EBIT and net income margins. Gross profit margin has decreased, indicating pressure on cost management. Despite growing revenue, the company is yet to achieve profitability.65
Positive
Balance Sheet
The company's balance sheet reflects a moderate debt-to-equity ratio, with total debt being a significant portion of stockholders' equity. The equity ratio stands at a healthy level, indicating that a substantial portion of assets is funded by equity. However, the high net debt may pose risks if cash flows do not improve.70
Positive
Cash Flow
Health Catalyst is experiencing challenges in generating free cash flow, with negative free cash flow in the TTM. The operating cash flow to net income ratio is low, suggesting inefficiencies in converting income into cash. The company needs to focus on improving operational efficiency to enhance cash generation.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 311.27M | 306.58M | 295.94M | 276.24M | 241.93M | 188.84M |
| Gross Profit | 130.37M | 140.78M | 131.83M | 133.19M | 117.57M | 90.77M |
| EBITDA | -24.73M | -27.10M | -68.28M | -82.92M | -101.68M | -79.47M |
| Net Income | -72.66M | -69.50M | -118.15M | -137.40M | -153.21M | -115.02M |
Balance Sheet | ||||||
| Total Assets | 891.54M | 858.93M | 701.81M | 752.29M | 832.10M | 577.74M |
| Cash, Cash Equivalents and Short-Term Investments | 341.97M | 392.00M | 317.73M | 363.49M | 444.98M | 270.87M |
| Total Debt | 251.07M | 402.26M | 249.07M | 247.97M | 204.61M | 195.28M |
| Total Liabilities | 514.73M | 493.72M | 334.89M | 327.28M | 310.00M | 301.64M |
| Stockholders Equity | 376.81M | 365.21M | 366.92M | 425.01M | 522.10M | 276.10M |
Cash Flow | ||||||
| Free Cash Flow | -9.67M | -1.84M | -47.39M | -52.68M | -41.59M | -36.61M |
| Operating Cash Flow | 4.57M | 14.56M | -33.08M | -35.27M | -23.12M | -26.15M |
| Investing Cash Flow | -10.12M | -22.90M | 20.29M | -39.02M | -139.68M | -82.56M |
| Financing Cash Flow | 32.12M | 151.75M | 2.73M | -2.61M | 264.08M | 182.61M |
Health Catalyst Technical Analysis
Negative
3.81
Price Trends
3.92
Negative
4.27
Negative
5.94
Negative
Market Momentum
-0.06
Positive
46.35
Neutral
44.96
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HCAT, the sentiment is Negative. The current price of 3.81 is below the 20-day moving average (MA) of 3.86, below the 50-day MA of 3.92, and below the 200-day MA of 5.94, indicating a bearish trend. The MACD of -0.06 indicates Positive momentum. The RSI at 46.35 is Neutral, neither overbought nor oversold. The STOCH value of 44.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HCAT.
Health Catalyst Risk Analysis
Health Catalyst disclosed 60 risk factors in its most recent earnings report. Health Catalyst 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
Health Catalyst Peers Comparison
Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
61 Neutral | $265.18M | ― | -19.80% | ― | 4.88% | 37.87% | |
54 Neutral | $207.97M | ― | -21.32% | ― | 27.07% | 6.74% | |
52 Neutral | $282.95M | 67.11 | 2.88% | ― | ― | 61.09% | |
52 Neutral | $334.21M | ― | -48.98% | ― | -9.95% | 20.78% | |
51 Neutral | $7.44B | 0.40 | -61.90% | 2.33% | 17.14% | 1.55% | |
51 Neutral | $151.74M | ― | -76.01% | ― | 25.62% | 11.86% |
* Healthcare Sector Average
Performance Comparison
HCAT
Health Catalyst
3.77
-2.33
-38.20%
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CVRX
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5.88
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ABSI
AbSci
2.57
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OABI
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1.74
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-52.59%
Health Catalyst Corporate Events
Executive/Board ChangesBusiness Operations and StrategyFinancial Disclosures
Health Catalyst Announces Board Changes Amid Strong Growth
Positive
Feb 26, 2025
On February 20, 2025, Anita Pramoda resigned from the Health Catalyst Board, effective March 1, 2025, and the Board approved accelerating the vesting of her RSUs. Her resignation was not due to any conflict with the company. Health Catalyst reported strong financial results for 2024, with a total revenue of $307 million and an Adjusted EBITDA of $26 million, and anticipates further growth in 2025. The company also announced leadership changes, including the appointment of Dr. Jill Hoggard Green to the Board and promotions within the leadership team.
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.