When hunting for growth stocks that can outpace the TSX, investors should keep a few key factors in mind. Look for companies with strong revenue growth and a solid track record of increasing earnings. Pay attention to industries poised for expansion, such as technology or renewable energy, and consider their competitive advantages.
Furthermore, evaluate their financial health by examining metrics like profit margins, return on equity, and manageable debt levels. Lastly, don’t forget to consider the management team’s experience and vision, as a capable leadership can effectively drive a company’s growth strategy. With these insights, investors can better position themselves to find those hidden gems that could outperform the TSX. Gems just like this one.
WELL Health
WELL Health Technologies (TSX:WELL) is carving out a unique space in the healthcare sector on the TSX. This makes it a noteworthy growth stock for investors. The company focuses on digitizing and modernizing healthcare services across Canada, offering a range of solutions that enhance patient care and streamline operations for healthcare providers. With the growing demand for telemedicine and digital health services, Well Health is well-positioned to benefit from this trend. Its impressive acquisitions of various clinics and telehealth platforms showcase their strategy to expand their footprint in the healthcare landscape, providing both immediate value and long-term growth potential.
Financially, Well Health has been on a growth trajectory, with consistent revenue increases and a strong focus on innovation. Its investments in technology not only enhance patient experiences but also optimize clinic operations. This bodes well for future profitability. Additionally, the company’s commitment to integrating electronic medical records and improving access to care aligns with the broader shift towards digital health solutions. As the healthcare sector continues to evolve, Well Health’s focus on technology and patient-centred services makes it a compelling option for investors looking for growth in the healthcare space on the TSX.
Into earnings
Investors looking at WELL Health Technologies should take note of their impressive earnings report for Q2 2024. The company achieved record quarterly revenues of $243.1 million, up a staggering 42% from the same period last year, with organic growth contributing 21% of this increase. This growth is underpinned by a remarkable 1.4 million patient visits. This represents a 38% year-over-year increase. WELL is not just expanding in numbers but also enhancing its operational efficiency, as seen in their focus on leveraging technology, including their partnership with Microsoft to improve healthcare delivery. Furthermore, WELL is optimistic about the future, raising its annual revenue guidance to between $970 million and $990 million for 2024. This signals strong confidence in sustained growth.
Another critical takeaway is WELL’s commitment to profitability and cash flow management. It reported a positive adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $30.9 million. Despite facing higher costs, the healthtech is showcasing its ability to adapt and optimize operations. With plans to reduce debt and maintain a focus on capital-efficient growth, WELL is positioning itself for long-term success while ensuring healthy cash flow for shareholder returns. The company’s strategic acquisitions and partnerships further enhance its market position, particularly in the fast-growing telehealth sector. Investors can feel encouraged by the solid growth trajectory and potential for continued success as WELL Health navigates the evolving landscape of digital healthcare.
Still valuable
With a market cap of $1.2 billion and trailing price/earnings (P/E) ratio of just 8.2, the stock appears undervalued compared to its peers. Its surge in revenue reflects robust operational momentum and indicates a healthy demand for its products and services.
Another key takeaway is the solid balance sheet and cash flow position the company is maintaining. With a current ratio of 1.3, the company shows it has adequate liquidity to cover its short-term liabilities. While its operating cash flow of $88.8 million suggests strong cash generation capabilities. Although the company is currently not paying dividends, its profit margin of 16.2% and return on equity of 18.3% indicate effective management and a focus on maximizing shareholder value. As it continues to build on its growth trajectory, this stock presents a compelling opportunity for investors looking for potential long-term gains, especially in the context of an improving financial outlook.
