Well Health Technologies (TSX:WELL) has had an interesting couple of years. The company continues to post record results, yet Well Health’s stock price continues to decline. It’s a dichotomy that I don’t think will last too long. Therefore, I would consider acting now.
Here are three reasons to buy Well Health Stock right now.
Well Health stock continues to get crushed
For shareholders like me, watching Well Health’s stock price tumble has not been fun. Yet, for all the frustration it is causing me, it’s also giving me the opportunity to buy more of the stock at lower prices. If I believe in the long-term story, this is exactly what I should be doing.
As you can see from the graph below, Well Health Technologies stock has declined 20%. In the last three years, it has declined 52%. The problem with the stock, in my view, is that it is what we can classify as a high-risk stock. In this market, high-risk stocks have not generally been the best performers due to the lower risk tolerance of investors relative to a few years ago.
In addition to this, the fact that the company has been operating with net losses and will increase debt due to its acquisition strategy makes it easy to see why investors are risk averse. But the company continues to post record revenues and is now finally turning the corner to profitability.
Well Health’s results reflect strong demand
In 2018, Well Health reported revenue of $10.6 million. In 2023, revenue totalled $776.1 million, 36% higher than last year. This is a dramatic increase and a reflection of the need that the company is addressing. It is, in fact, revolutionizing health care systems. This is driving efficiencies, better patient care, and, ultimately, a better experience for both providers and patients.
Looking ahead, Well Health management has increased its revenue guidance once again. For 2024, we can expect revenue to come in between $950 million and $970 million for an up to 25% growth rate.
Along with this revenue growth, Well Health has been driving profitability. On this front, the company is making good progress. 2024 estimates are calling for a break-even year, which compares to net losses in many prior years. Sustained profitability will come in 2025, with expectations calling for earnings per share of $0.09.
The digitization of health care has only just begun
The healthcare system has been notoriously behind in its use of technology despite the many advantages that it brings. Well Health saw the opportunity and began its digitization quest. And this quest has only just begun.
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In Canada, there is a significant opportunity in primary care. With 167 clinics and 98 facilities, Well Health is the largest player in the market. Yet, it only has an estimated 1% of total physician spending. In this area alone, Well Health generated $300 million in 2024. Well believes that this business alone could easily exceed $1 billion over time.
The bottom line
Investors willing to take on this volatile stock should consider it at this time. Well Health Technologies stock is likely to perform well over the long term as it continues to help digitize health care.
