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Waystar Holding Corp. (WAY)
NASDAQ:WAY
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Waystar Holding Corp.
(NASDAQ:WAY)
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Rating:72Outperform
Price Target:
$27.00
▲(10.66% Upside)
Action:ReiteratedDate:02/18/26
The score is driven primarily by improving fundamentals (profitability inflection and much stronger balance sheet) and a constructive earnings outlook (strong 2026 guidance, record bookings, and margin profile). These positives are tempered by weak technicals (price below major moving averages and negative MACD) and a relatively high P/E with no dividend yield provided.
Positive Factors
Revenue & profitability turnaround
Waystar has scaled revenue materially while re-establishing net profitability in 2025. Durable scale and positive net income improve reinvestment capacity, reduce execution risk, and underpin longer-term cash generation needed for product development, AI adoption, and integration of acquisitions.
High margins and explicit 2026 margin guidance
Consistently high adjusted-EBITDA margins (near 42%) and explicit guidance signal durable operating leverage and pricing strength in core offerings. Sustained margins increase free cash flow potential and provide margin cushion to fund AI initiatives and integration costs while supporting competitive differentiation.
Strong cash conversion and deleveraging plan
High conversion of adjusted EBITDA to unlevered free cash flow indicates efficient cash generation. A stated plan to delever roughly one turn annually and recent reduction in net leverage improve financial flexibility, supporting strategic investments and lowering solvency risk over the medium term.
Negative Factors
Residual leverage and liquidity concentration
Despite progress, substantial gross debt and relatively modest cash create ongoing financial risk. At ~3.0x net leverage, adverse cash-flow or execution slippage could constrain investment, slow deleveraging, or necessitate operational trade-offs, limiting flexibility during cyclical stress.
Large-deal ramp timing risk
A greater share of bookings coming from large, multi-quarter deals reduces near-term revenue visibility; multi-quarter ramps can decouple bookings from recognized revenue. This timing mismatch can cause quarter-to-quarter volatility and delays in converting bookings into sustainable cash flow.
Patient-payment seasonality and utilization sensitivity
Volume-based revenue is exposed to seasonal deductible timing and healthcare utilization trends. Reliance on patient-payment flows and utilization implies recurring cyclicality and sensitivity to macro health utilization shifts, which can materially affect revenue and margin realization across quarters.
Waystar Holding Corp. (WAY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.84B
Dividend YieldN/A
Average Volume (3M)2.89M
Price to Earnings (P/E)40.0
Beta (1Y)0.93
Revenue Growth14.75%
EPS GrowthN/A
CountryUS
Employees1,500
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)0.36
Shares Outstanding191,681,600
10 Day Avg. Volume4,444,296
30 Day Avg. Volume2,886,262
Financial Highlights & Ratios
PEG Ratio-0.10
Price to Book (P/B)1.62
Price to Sales (P/S)5.70
P/FCF Ratio22.13
Enterprise Value/Market Cap1.31
Enterprise Value/Revenue5.77
Enterprise Value/Gross Profit8.92
Enterprise Value/Ebitda15.63
Forecast
1Y Price Target
$38.29Price Target Upside56.93% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering18
EPS Forecast (FY)1.63
Revenue Forecast (FY)$1.29B
Waystar Holding Corp. Business Overview & Revenue Model
Company DescriptionWaystar Holding Corp. develops a cloud-based software solution for healthcare payments. Its platform offers financial clearance, patient financial care, claim and payment management, denial prevention and recovery, revenue capture, and analytics and reporting solutions. The company primarily serves healthcare industry. Waystar Holding Corp. was founded in 2017 and is based in Lehi, Utah.
How the Company Makes MoneyWaystar generates revenue through a subscription-based model, offering its software solutions to healthcare providers, which include hospitals, clinics, and outpatient facilities. The company charges fees for access to its platform, which encompasses various services such as claims management, patient billing, and analytics. Key revenue streams include recurring subscription fees, transaction fees associated with payment processing, and additional services like consulting and support. Partnerships with healthcare organizations and technology providers also contribute significantly to its revenue, as they expand Waystar's market reach and enhance service offerings.
Waystar Holding Corp. Earnings Call Summary
Earnings Call Date:Feb 17, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 06, 2026
Earnings Call Sentiment Positive
The call emphasized substantial positive execution: record bookings, strong top-line growth (Q4 +24% YoY; FY +17% YoY), robust margins (adjusted EBITDA margin ~42–43%), meaningful cash conversion and deleveraging progress, rapid AI adoption and measurable AI outcomes (>$15B denials prevented). Acquisition of Iodine materially expands addressable market and AI/clinical data capabilities with synergies ahead of plan. Key risks discussed include seasonality and deductible timing impacting patient payment revenue, near-term cost step-ups from the acquisition, leverage and cash levels, some one-off tailwinds to retention, and the multi-quarter ramp of large deals. On balance the positives substantially outweigh the challenges.Q4-2025 Updates
Positive Updates
Record Annual Revenue and Guidance
Full-year 2025 revenue reached $1,100,000,000, up 17% year-over-year (organic +13%). Management guided 2026 revenue of $1,274,000,000 to $1,294,000,000 (midpoint $1,284,000,000), implying ~17% year-over-year growth with ~10% normalized organic growth.
Strong Q4 Revenue and Organic Growth
Q4 2025 revenue was $304,000,000, up 24% year-over-year and 12% organically. Both subscription and volume-based revenue contributed to growth.
Margin Expansion and Adjusted EBITDA Growth
Adjusted EBITDA for Q4 was $129,000,000 (margin ~43%), up 29% year-over-year. Full-year adjusted EBITDA was $462,000,000 (42% margin), up 21% year-over-year. 2026 adjusted EBITDA guidance midpoint $535,000,000 (approx. +16% YoY) targeting ~42% margin.
Record Bookings and Large Deal Activity
Company reported a record bookings quarter in Q4, including an elevated count of $1M+ bookings (15–20 each in Q3 and Q4, more than 2x the three-year quarterly average), supporting forward visibility despite multi-quarter ramp timelines.
Iodine Acquisition and Synergy Progress
Completed acquisition of Iodine: contributed $31,000,000 in Q4, added >1,000 hospitals/health systems with ~35% customer overlap. Integration is ahead of plan and management expects to realize >90% of committed $15,000,000 cost synergies in fiscal 2026 (~$14,000,000).
AI Performance and Adoption
Waystar Altitude AI prevented >$15,000,000,000 in denials in 2025, reduced appeal package generation time by 90%, drove double-digit increases in denial overturn rates, and launched agentic capabilities that cut documentation analysis by ~40%. About 50 solutions leverage AI and ~40% of revenue is driven by AI; ~30% of 2025 new bookings were AI-powered.
Strong Retention, NPS and Commercial Metrics
Net revenue retention (NRR) was 112% (last twelve months) with 97% gross revenue retention. Net promoter score exceeded 70. Clients with >$100k LTM revenue increased by 85 in Q4 to 1,391 (+16% YoY), and win rates improved above a historical ~80%.
Cash Flow, Leverage Improvement and Conversion
Unlevered free cash flow was $80,000,000 in Q4 and $365,000,000 for the full year, converting 79% of adjusted EBITDA to unlevered free cash flow. Net leverage was ~3.0x as of Dec 31, down ~0.5x since the Iodine close, with plan to run at or below 3.0x and delever ~1.0x per year.
Negative Updates
Patient Payment Seasonality and Sequential Pressures
Volume-based revenue (Q4 $134,000,000) grew 11% YoY but was only +1% sequentially; patient payment solutions were lower Q4-to-Q3 due to seasonal deductible timing and high-deductible plan patients hitting deductibles, contributing to expected Q3 sequential softness in 2026 guidance.
Increased Operating Costs Post-Acquisition
G&A, R&D and D&A stepped up entering Q4 reflecting a full quarter of Iodine; adjusted EBITDA margin benefit from realized acquisition cost synergies was only ~$2,000,000 in Q4 (~1% margin uplift), with management guiding to ~$14,000,000 synergies in 2026 (about 1% uplift).
Leverage and Cash Position
Ended the quarter with $86,000,000 in cash and equivalents against $1,500,000,000 in gross debt. Net leverage remains ~3.0x, which management is improving but still represents financial leverage risk until further deleveraging.
NRR Benefit Partly Driven by External One-Off Event
Management disclosed that part of the rapid time-to-revenue and NRR benefit was driven by clients impacted by a competitor's 2024 cyber event, suggesting some portion of the recent retention/expansion may be non-recurring or event-driven.
Revenue Realization Lag from Large Deals
Large bookings (many $1M+ deals) contribute to a robust pipeline, but management reiterated these typically take 6–18 months to fully ramp, introducing timing risk between bookings and recognized revenue.
Exposure to Healthcare Utilization Assumptions
2026 guidance assumes 'healthy' patient utilization; management noted reliance on utilization for normalized organic growth (~10%), introducing sensitivity to macro or utilization downturns that could negatively affect volume-based and subscription consumption revenue.
Company Guidance
Waystar guided 2026 revenue of $1,274,000,000 to $1,294,000,000 (midpoint $1,284,000,000), implying 17% year‑over‑year growth and roughly 10% normalized organic growth (with a similar implied rate for Iodine), and expects sequential revenue growth of 1%–3% through the year (Q3 at the low end due to patient‑payment seasonality); adjusted EBITDA guidance is $530,000,000 to $540,000,000 (midpoint $535,000,000), about 16% year‑over‑year growth and an adjusted EBITDA margin near 42% (gross margin ~68%), which includes ~1% margin uplift from realizing approximately $14,000,000 of acquisition cost synergies in 2026 (over 90% of the committed $15,000,000); management reiterated a long‑term adjusted EBITDA margin target of 40%, expects to run the business at or below ~3.0x net leverage (net leverage was ~3.0x at 12/31) and to delever roughly one turn annually, and assumed healthy patient utilization and that record bookings will ramp over six to eighteen months.Waystar Holding Corp. Financial Statement Overview
Summary
Fundamentals are improving: revenue rose from $579M (2021) to $1.10B (2025) and the company returned to profitability in 2025 (~$112M net income). Balance-sheet risk is materially lower with debt reduced to ~$32M (2025) and very low debt-to-equity (~0.01x). Offsetting positives, cash-flow trend is uneven (2025 FCF down -46.5% YoY) and profitability/operating metrics show some volatility/inconsistency.Income Statement
Revenue has grown steadily from $579M (2021) to $1.10B (2025), with strong gross profitability (gross margin consistently ~66–74%). After several years of net losses (2021–2024), the company turned profitable in 2025 with ~$112M net income (~10.2% net margin), signaling improving earnings quality. Offsetting this, profitability has been somewhat volatile across years, and the provided operating-profit margin data is inconsistent (2025 shows 0%), which limits confidence in the operating trend.78
Positive
Balance Sheet
The balance sheet strengthened materially: total debt fell from ~$2.30B (2021) to ~$32M (2025), driving debt-to-equity down from ~1.08x to ~0.01x. Equity is sizable (~$3.88B in 2025) and assets increased to ~$5.79B, indicating significant balance-sheet capacity and reduced financial risk. The main weakness is that returns on equity were negative through 2024 and are still modest in 2025 (~2.9%), suggesting profitability is improving but not yet high relative to the capital base.92
Very Positive
Cash Flow
Cash generation is solid in 2025, with operating cash flow of ~$310M and free cash flow of ~$283M, and cash conversion remains strong (free cash flow is ~91% of net income). However, free cash flow growth in 2025 was negative (-46.5%) versus the prior year, and earlier periods show variability in operating cash flow (notably weaker in 2023). Overall, the business generates cash, but the trajectory is not consistently upward year to year.74
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.10B | 943.55M | 791.01M | 704.87M | 578.57M |
| Gross Profit | 710.67M | 627.82M | 541.24M | 489.98M | 426.80M |
| EBITDA | 405.85M | 310.36M | 318.55M | 272.62M | 236.37M |
| Net Income | 112.09M | -19.13M | -51.33M | -51.45M | -47.12M |
Balance Sheet | |||||
| Total Assets | 5.95B | 4.58B | 4.58B | 4.69B | 4.78B |
| Cash, Cash Equivalents and Short-Term Investments | 86.23M | 182.13M | 45.43M | 64.56M | 47.25M |
| Total Debt | 1.50B | 1.26B | 2.25B | 2.26B | 2.30B |
| Total Liabilities | 2.08B | 1.50B | 2.53B | 2.59B | 2.66B |
| Stockholders Equity | 3.88B | 3.08B | 2.05B | 2.11B | 2.12B |
Cash Flow | |||||
| Free Cash Flow | 283.19M | 142.50M | 29.94M | 85.20M | 91.86M |
| Operating Cash Flow | 309.67M | 169.77M | 51.46M | 102.63M | 106.41M |
| Investing Cash Flow | -680.90M | -27.27M | -61.52M | -17.43M | -444.33M |
| Financing Cash Flow | 243.45M | 16.65M | -17.15M | -67.06M | 331.50M |
Waystar Holding Corp. Technical Analysis
Neutral
24.40
Price Trends
28.78
Negative
32.50
Negative
35.18
Negative
Market Momentum
-1.06
Negative
49.71
Neutral
79.28
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WAY, the sentiment is Neutral. The current price of 24.4 is below the 20-day moving average (MA) of 24.60, below the 50-day MA of 28.78, and below the 200-day MA of 35.18, indicating a neutral trend. The MACD of -1.06 indicates Negative momentum. The RSI at 49.71 is Neutral, neither overbought nor oversold. The STOCH value of 79.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for WAY.
Waystar Holding Corp. Risk Analysis
Waystar Holding Corp. disclosed 58 risk factors in its most recent earnings report. Waystar Holding 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
Waystar Holding Corp. Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $4.56B | 18.57 | 27.25% | ― | 14.43% | 29.86% | |
73 Outperform | $6.54B | 12.12 | 22.37% | 1.41% | 7.40% | -14.45% | |
72 Outperform | $4.84B | 40.03 | 3.22% | ― | 14.75% | ― | |
71 Outperform | $2.93B | 46.64 | 12.80% | ― | 44.34% | 45.96% | |
68 Neutral | $7.12B | 19.47 | 10.34% | ― | 14.26% | -15.49% | |
64 Neutral | $3.95B | 11.18 | 23.75% | 1.69% | -0.38% | 31.38% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
WAY
Waystar Holding Corp.
25.65
-17.82
-40.99%
EPAM
Epam Systems
141.00
-65.14
-31.60%
EXLS
Exlservice Holdings
31.25
-17.20
-35.50%
G
Genpact
39.72
-12.71
-24.24%
SAIC
Science Applications
92.26
-5.20
-5.34%
PAY
Paymentus Holdings
24.47
-2.93
-10.69%
Waystar Holding Corp. Corporate Events
Executive/Board Changes
Waystar Chief Business Officer Announces Upcoming Resignation
Neutral
Feb 6, 2026
Waystar Holding Corp. announced that Chief Business Officer Eric (Ric) Sinclair III informed the company on February 2, 2026, that he will resign effective March 2, 2026, to take a role at another firm. The company stated that Sinclair’s departure does not stem from any disagreement over its operations, policies, or practices, and that he will receive his 2025 annual bonus under standard procedures, with no additional severance or separation benefits, signaling an orderly and non-contentious leadership transition for stakeholders.
The most recent analyst rating on (WAY) stock is a Buy with a $27.00 price target. To see the full list of analyst forecasts on Waystar Holding Corp. stock, see the WAY Stock Forecast page.
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.