The past five years have been eventful for Canadian healthcare innovator WELL Health Technologies (TSX:WELL) stock, which posted its second-highest monthly return of 49.3% in September 2020. The stellar performance was second only to WELL Health stock’s 76.1% monthly return seen for July 2019. However, the Canadian growth stock’s monthly returns have been random over the past decade, and shares have averaged a 2.5% monthly gain for September.
WELL Health stock has generated 68.7% in shareholder returns so far this year.
Positive momentum is on its good side going into September. However, past performance is no indication of future returns and this remains true for a largely volatile WELL Health stock. Market sentiment, the company’s fundamental performance, and the TSX growth stock’s valuation will influence future returns.
What to watch on WELL Health stock in September
Although WELL Health isn’t a micro-cap stock yearning to be “discovered” anymore, the small-cap company will present at Planet MicroCap Showcase in Vancouver on September 6, 2023. Institutional wealth managers, investment analysts, hedge fund managers, angel investors, retail investors, and industry executives, among other market participants and deal makers, will attend the two-day investor conference. These teams can move stocks, and stock markets.
Investor conferences can be significant catalysts for stock price growth if management can “sell” the company to an attentive audience seeking deals. Management could put out a convincing story, present a compelling narrative, and lay out a strategic vision that more investors fall in love with. WELL Health stock could potentially post some gains after the company’s presentations in September.
That said, the company is a well-known $1.1 billion healthcare innovator stock. As a listed company whose information disseminations are governed by tight financial securities laws, there isn’t much material information about the company’s operations for management to share. The market already knows so much – perhaps except for new acquisition deals and strategic changes that may be announced concurrently with its presentations.
Should you buy WELL Health stock?
If you are looking for a long-term growth stock, WELL Health Technologies is a growth stock to buy and hold as it continues to execute organic growth and acquires more market share.
Its acquisitions-led growth strategy is amplifying organic revenue growth efforts. Following its 18th consecutive quarter of record revenue, the company upgraded its revenue guidance for 2023 in August reflecting “improved organic growth expectations for the balance of the year.” The latest guidance for between $740 million and $760 million in revenue for this year implies potential 32% growth in sales this year.
The company reported 21.8% year-over-year growth in second quarter revenue to $170.9 million. Its Canadian patient services are growing sustainably and expansion into the United States continues to unlock high revenue growth rates. The company is growing its operating earnings. A sustained reduction in debt levels from a December 2021 peak helps de-risk the growth stock, too.
Most noteworthy, WELL Health’s latest investment program targeting artificial intelligence (AI) startups could be a significant growth catalyst to watch over the coming months. If AI proves to be a sustainable investment theme (and not a fad), then WELL Health could build a “priceless” portfolio of valuable AI tools and platforms that revolutionize health delivery in North America and globally.
WELL stock remains fairly valued with a price-to-sales (P/S) multiple of 1.7 which compares well against an industry P/S multiple of 13.9.
That said, given that the stock has rallied significantly so far in 2023, shares may remain in a consolidation trough for longer. Short-term trades may not be that mesmerizingly profitable.
