WELL Health Stock Soared 24% in February – Too Late to Buy Now?

After a huge fall, WELL Health stock is now on a major climb. So what’s caused the huge influx of investors to pick it up?

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WELL Health Technologies (TSX:WELL) has been one of those anomalies of the last few years. While everything went down during the pandemic, WELL Health stock soared with the promise of healthcare at home.

And yet, the company fell once again for two reasons. First, it rose and fell with pandemic demand for online services. Further, WELL stock benefitted because it is a tech stock in the telehealth sector. Nonetheless, in the past month, shares have climbed 24%! So what’s going on with WELL Health stock, and is it too late to buy?

How the climb started

On the surface, it looks like there hasn’t been much going on with WELL Health stock. And, indeed, the company has not made many huge announcements. Instead, it’s the announcement from the Ontario government that seems to have caused the stock to rise.

About a month ago, the government announced it would be using a “multi-pronged” strategy to reduce the insane wait-times many Ontarians continue to witness. And because WELL Health is the largest single license holder and service provider in Ontario through its MyHealth Partners, it was a no-brainer to seek help. Using WELL technology to provide diagnostics, reduce unnecessary MRIs, and lower central intake procedures could reduce wait times drastically. And, of course, it would all be covered by OHIP.

As a long-standing and accomplished partner within the Ontario healthcare system, we are committed to making ongoing investments in the province to ensure that patients get access to timely treatment and quality care.

Dina Sergi, Vice-President of Operations for MyHealth

Is it enough?

WELL Health stock has fallen below earnings estimates for several quarters in a row. Analysts haven’t come out with any new potential upsides from this news, especially with those earnings falling lower than expected. So is the recent announcement enough?

To many investors it certainly was, with the climb in share price seeming to be directly related to this news. It does look like this could be an incredible short-term win for WELL Health stock. As the province with the highest population, government support for Ontarians to claim telehealth online means less wait times, and more revenue for WELL Health.

But that’s not all that should be considered when it comes to this company – especially for long-term investors.

Think long-term

I’ve long been an advocate for WELL Health stock. This comes down to the simple truth that online health services are simply too cheap and too convenient to be ignored. Think about all the people in rural Ontario who have little access to hospitals and a doctor’s office for minor issues. This means they can get fully covered help with much of these issues. And this is only in Ontario. This move could cause other provinces to jump on board.

Yet, the growth potential doesn’t stop there. WELL Health may be the largest outpatient clinic in Canada, but it’s now moving to the United States as well. Several acquisitions have set it up for more revenue. And despite falling below estimates, it has managed to announce several record-breaking earnings reports.

So while shares may be up 24% in the last month, there is certainly more potential for growth – especially as analysts predict WELL to double in the next year and beyond.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has positions in WELL Health Technologies. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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