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Health Catalyst (HCAT)
NASDAQ:HCAT
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Health Catalyst
(NASDAQ:HCAT)
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Rating:49Neutral
Price Target:
$3.50
▲(25.00% Upside)
Health Catalyst's overall stock score reflects significant challenges in financial performance, with ongoing profitability issues and negative cash flows. The technical analysis indicates a bearish trend, while the valuation is unattractive due to a negative P/E ratio. Despite positive strategic initiatives and earnings call highlights, macroeconomic challenges and funding cuts weigh heavily on the company's outlook.
Positive Factors
Technology Segment Growth
The strong growth in the Technology segment indicates robust demand for Health Catalyst's data solutions, enhancing its competitive position in the healthcare analytics market.
High-Margin Application Revenue
The focus on high-margin application revenue supports sustainable profitability, as these products contribute significantly to the company's bottom line.
Strong Client Relationships
Maintaining strong relationships with top clients ensures a stable revenue base and reflects the company's ability to deliver value, fostering long-term business stability.
Negative Factors
Profitability Challenges
Ongoing profitability challenges indicate difficulties in cost management and achieving sustainable profit, which may hinder long-term financial health.
Revenue Guidance Revision
The downward revision in revenue guidance reflects macroeconomic pressures and funding cuts, potentially impacting future growth and financial performance.
Cash Flow Issues
Persistent negative cash flows indicate inefficiencies in cash generation, which could strain liquidity and limit investment in growth opportunities.
Health Catalyst (HCAT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$197.05M
Dividend YieldN/A
Average Volume (3M)806.08K
Price to Earnings (P/E)―
Beta (1Y)1.31
Revenue Growth5.55%
EPS Growth-0.99%
CountryUS
Employees1,500
SectorHealthcare
Sector Strength45
IndustryMedical - Healthcare Information Services
Share Statistics
EPS (TTM)0.04
Shares Outstanding70,373,630
10 Day Avg. Volume615,551
30 Day Avg. Volume806,081
Financial Highlights & Ratios
PEG Ratio0.14
Price to Book (P/B)1.17
Price to Sales (P/S)1.39
P/FCF Ratio-231.38
Enterprise Value/Market Cap1.72
Enterprise Value/Revenue1.07
Enterprise Value/Gross Profit2.36
Enterprise Value/Ebitda-9.51
Forecast
1Y Price Target
$4.43Price Target Upside58.21% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
Health Catalyst Business Overview & Revenue Model
Company DescriptionHealth Catalyst (HCAT) is a leading provider of data and analytics technology and services for healthcare organizations. The company specializes in delivering solutions that enhance clinical, operational, and financial outcomes for healthcare providers and payers. Health Catalyst's core offerings include a data operating system, analytics applications, and consulting services designed to help clients leverage data to drive performance improvement and strategic decision-making in the healthcare sector.
How the Company Makes MoneyHealth Catalyst generates revenue primarily through a subscription-based model for its software solutions, which includes licensing fees for its data operating system and analytics applications. Additionally, the company earns revenue from consulting services that assist healthcare organizations in implementing and optimizing its technologies. Key revenue streams also include maintenance and support services, as well as professional services tailored to specific client needs. Significant partnerships with healthcare providers and payers, along with ongoing contracts for software and consulting services, contribute to its earnings. The company also benefits from a growing demand for data-driven solutions in the healthcare industry, which further enhances its revenue potential.
Health Catalyst Earnings Call Summary
Earnings Call Date:Aug 07, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 11, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mix of positive performance metrics and strategic initiatives aimed at improving profitability, alongside significant challenges due to macroeconomic factors and funding cuts impacting revenue growth and client contracts.Q2-2025 Updates
Positive Updates
Outperformance in Q2 2025 Revenue and EBITDA
Q2 2025 revenue was $80.7 million and adjusted EBITDA was $9.3 million, both outperforming guidance.
Technology Segment Growth
The Technology segment recorded an 11% revenue growth year-over-year in Q2 2025.
Strong Relationships with Top Clients
Health Catalyst maintained ongoing relationships with 98 out of its 100 largest platform clients by technology revenue from year-end 2024.
Profitability Improvement Initiatives
Restructuring efforts and renegotiation of contracts expected to improve profitability by over $40 million on an annualized basis.
Focus on High-Margin Application Revenue
Applications revenue, which produces a gross margin of over 80% and an adjusted EBITDA margin of 30%, grew more than 20% year-over-year.
Positive Adjusted EBITDA Guidance
Q3 adjusted EBITDA is guided at $10.5 million, representing 44% growth year-over-year, with a run rate of $60 million going into 2026.
Negative Updates
Revenue Guidance Revision
Full-year 2025 revenue guidance revised down to $310 million due to Medicaid and research funding cuts.
Lower Dollar-Based Retention
Expected dollar-based retention for 2025 revised down to the low 90s due to clients pocketing savings from Ignite migrations.
Reduced New Client Additions
Expectation for net new platform clients in 2025 reduced to 30 due to delays in signing new contracts.
Professional Services Revenue Decline
Professional services revenue for Q2 2025 decreased by 1% year-over-year.
Macro Challenges and Funding Cuts Impact
Significant impact from $1 trillion cut in Medicaid and additional billions in research funding cuts, affecting end market and company performance.
Restructuring and Workforce Reduction
Restructuring involves a 9% reduction in workforce to align with current priorities.
Company Guidance
During the Health Catalyst second quarter 2025 earnings call, the company reported a Q2 2025 revenue of $80.7 million and an adjusted EBITDA of $9.3 million, both exceeding guidance. Year-over-year growth in their Technology segment was 11%, while Professional Services revenue declined by 1%. Despite facing macroeconomic challenges, including significant Medicaid and research funding cuts, Health Catalyst revised its full-year 2025 revenue guidance to $310 million but maintained its adjusted EBITDA guidance at $41 million. The company highlighted a strategic focus on profitability, with plans to improve adjusted EBITDA margins beyond 20% in the future. Additionally, due to these headwinds and a shift in their M&A strategy, they removed their 2028 revenue and adjusted EBITDA targets. The company is also restructuring, impacting 9% of the workforce, aiming to improve profitability by over $40 million annually. The call emphasized a focus on expanding higher-margin applications revenue and leveraging their Ignite platform to mitigate revenue headwinds, expecting these transitions to complete by mid-2026.Health Catalyst Financial Statement Overview
Summary
Health Catalyst is experiencing growth in revenue but continues to face profitability challenges. The balance sheet shows some improvement in leverage, but past high debt levels remain a concern. Cash flow issues persist, with negative operating cash flows indicating potential liquidity constraints. The company needs to focus on improving operational efficiency and profitability to enhance its financial health.Income Statement
Health Catalyst's income statement shows modest revenue growth with a TTM increase of 1.55%. However, the company is struggling with profitability, as evidenced by negative net profit and EBIT margins. The gross profit margin is relatively stable at around 45%, but the persistent negative margins indicate challenges in cost management and achieving profitability.45
Neutral
Balance Sheet
The balance sheet reflects a moderate debt-to-equity ratio of 0.50 in the TTM, showing some improvement from previous years. However, the company has a negative return on equity, indicating that it is not generating profits from shareholders' equity. The equity ratio is reasonable, suggesting a balanced asset structure, but the high leverage in previous years poses a risk.50
Neutral
Cash Flow
The cash flow statement highlights significant challenges, with negative operating and free cash flows in the TTM. Although there is a notable improvement in free cash flow growth, the operating cash flow to net income ratio remains negative, indicating inefficiencies in converting income into cash. The free cash flow to net income ratio is positive, suggesting some ability to cover losses, but overall cash flow health is weak.40
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 316.09M | 306.58M | 295.94M | 276.24M | 241.93M | 188.84M |
| Gross Profit | 143.21M | 140.78M | 92.60M | 133.19M | 117.57M | 90.77M |
| EBITDA | -35.53M | -10.65M | -68.28M | -82.92M | -101.68M | -79.47M |
| Net Income | -100.12M | -69.50M | -118.15M | -137.40M | -153.21M | -115.02M |
Balance Sheet | ||||||
| Total Assets | 616.18M | 858.93M | 701.81M | 752.29M | 832.10M | 577.74M |
| Cash, Cash Equivalents and Short-Term Investments | 97.34M | 392.00M | 317.73M | 363.49M | 444.98M | 270.87M |
| Total Debt | 172.79M | 402.26M | 249.07M | 247.97M | 204.61M | 195.28M |
| Total Liabilities | 268.63M | 493.72M | 334.89M | 327.28M | 310.00M | 301.64M |
| Stockholders Equity | 347.55M | 365.21M | 366.92M | 425.01M | 522.10M | 276.10M |
Cash Flow | ||||||
| Free Cash Flow | -15.72M | -1.84M | -47.39M | -52.68M | -41.59M | -36.61M |
| Operating Cash Flow | -6.04M | 14.56M | -33.08M | -35.27M | -23.12M | -26.15M |
| Investing Cash Flow | -60.57M | -22.90M | 20.29M | -39.02M | -139.68M | -82.56M |
| Financing Cash Flow | -84.63M | 151.75M | 2.73M | -2.61M | 264.08M | 182.61M |
Health Catalyst Technical Analysis
Negative
2.80
Price Trends
3.34
Negative
3.63
Negative
4.50
Negative
Market Momentum
-0.15
Positive
37.85
Neutral
15.48
Positive
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 2.8 is below the 20-day moving average (MA) of 3.14, below the 50-day MA of 3.34, and below the 200-day MA of 4.50, indicating a bearish trend. The MACD of -0.15 indicates Positive momentum. The RSI at 37.85 is Neutral, neither overbought nor oversold. The STOCH value of 15.48 is Positive, 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 |
|---|---|---|---|---|---|---|---|
75 Outperform | 863.74M | 43.71 | 5.80% | 0.42% | 3.50% | 13.99% | |
68 Neutral | 348.65M | -34.74 | -17.19% | ― | 25.90% | 46.13% | |
52 Neutral | 567.08M | -1.50 | -74.11% | ― | -5.24% | 23.59% | |
51 Neutral | 1.05B | -5.57 | -18.04% | ― | -6.71% | -71.40% | |
51 Neutral | 279.10M | -3.76 | -95.70% | ― | 7.31% | -7.49% | |
49 Neutral | $197.05M | ― | -28.42% | ― | 5.55% | -0.99% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
Performance Comparison
HCAT
Health Catalyst
2.80
-5.34
-65.60%
HSTM
HealthStream
29.14
0.42
1.46%
OPRX
OptimizeRx
18.78
11.06
143.26%
EVH
Evolent Health
8.95
-19.33
-68.35%
SOPH
SOPHiA GENETICS
4.13
0.48
13.15%
DH
Definitive Healthcare Corp
3.98
-0.49
-10.96%
Health Catalyst Corporate Events
Executive/Board ChangesBusiness Operations and StrategyFinancial Disclosures
Health Catalyst CEO Retirement Announcement
Positive
Aug 7, 2025
On August 5, 2025, Health Catalyst announced that CEO Dan Burton plans to retire effective June 30, 2026, after 15 years of service. The company will conduct a search for a new CEO, while Burton will continue to serve on the Board. Additionally, Justin Spencer was appointed to the Board, effective September 1, 2025, expanding the Board to eight directors. Health Catalyst reported strong financial results for the second quarter of 2025, with a total revenue of $80.7 million and an Adjusted EBITDA of $9.3 million, surpassing their quarterly guidance. The company remains committed to achieving its goals and driving value for clients and shareholders during the leadership transition.
Executive/Board ChangesShareholder Meetings
Health Catalyst Stockholders Approve Key Governance Changes
Neutral
Jul 10, 2025
On July 9, 2025, Health Catalyst, Inc. held its annual meeting of stockholders, where four proposals were voted on. The stockholders elected two Class III directors, ratified the appointment of Ernst & Young LLP as the independent auditor, approved executive compensation, and supported a proposal to declassify the board of directors. These decisions reflect ongoing governance and operational strategies aimed at enhancing the company’s leadership structure and financial oversight.
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.