Not too long ago, Well Health Technologies Corp. (TSX:WELL) was riding high on pandemic-era stock market optimism. Today, this optimism for Well Health Technologies stock has waned as the macro-economic environment has deteriorated, and investors are feeling more risk averse.
But I’m keeping my eyes on the long-term, as there are many reasons to believe in Well Health.
Well Health is a disruptor in the health care industry
Those of you who have followed Well Health stock over the last few years know that it has been volatile. In truth, this volatility has largely been a function of investor sentiment. This is because emotions have run high, as this company promises to majorly disrupt the health care industry. And with this kind of disruption, potential rewards are very significant.
The Canadian healthcare system is especially sorely lacking in technology. This is what Well Health Technologies is out to change. The benefits of technology in the health system are multi-faceted. From lower wait times, improved patient outcomes and specialized and targeted treatment, to a lower administrative burden on doctors.
If you are not convinced of Well Health’s value proposition yet, read on to see proof of the increasing acceptance of its value. These are the reasons I think investing in Well Health stock could help you become a millionaire.
The proof is in the results
Well Health has been delivering record results for many quarters now. In its latest quarter, Q3 2023, the company reported a 40% increase in revenue to $204.5 million. This includes a 27% increase in Canadian patient services revenue and a 52% increase in USA patient care services. Organic growth was 16% and the rest of the growth was due to acquisitions.
As a result of this record performance, the company increased its revenue guidance again, bringing it closer to its target of reaching $1 billion in revenue. In fact, the company now expects revenue of $755 million to $765 million in 2023 and more than $900 million in 2024. This equates to a 34% revenue growth rate in 2023 and a more than 18% revenue growth rate in 2024. Note that these estimates do not include unannounced acquisitions, and management has stressed that its pipeline is very strong.
So, assuming this revenue guidance is achieved, the company will have grown from revenue of $10 million in 2018 to $900 million in 2024. That’s 8,400% revenue growth in six short years.
Well Health stock’s potential clouded in short term
I would be amiss if I didn’t mention the elephant in the room – Well Health is not profitable and is heavily investing in growth. This is enough to keep many smart investors away, and I understand this. However, if we want millionaire potential, we often have to buy despite this.
When I recommend Well Health Technologies stock, I do it with two key assumptions. The first is that investors understand the elevated risk of a company that’s currently operating at a net loss. This means investing a small portion of total funds into this type of stock.
The second assumption is that Well Health’s business is one that has staying power because it’s sorely needed and, thus, the company is increasingly building its network, scale, and expertise. This will result in continued growth for the company. And as the healthcare industry improves, this mutually beneficial relationship will continue to grow stronger.