Well Health Stock: Could This Healthcare Champion Hit New Highs in 2025?

Down over 30% from all-time highs, Well Health is a TSX stock that trades at a reasonable multiple in 2025.

| More on:
doctor uses telehealth

Source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Valued at a market cap of $1.68 billion, Well Health (TSX:WELL) went public in 2016. Since its initial public offering (IPO), WELL stock has returned 6,630% to shareholders. So, an investment of $500 in the TSX stock soon after its IPO would be worth close to $33,500 today. Despite these market-thumping gains, Well Health stock trades 27% below all-time highs, allowing you to buy a quality company at a lower multiple. Let’s see if the Canadian telehealth stock is a good buy in 2025.

Created with Highcharts 11.4.3Well Health Technologies PriceZoom1M3M6MYTD1Y5Y10YALL23 Jan 201724 Jan 2025Zoom ▾20182019202020212022202320242025201820182020202020222022202420240www.fool.ca

Can WELL stock rebound in 2025?

Well Health operates a Practitioner Enablement Platform with two revenue models:

  • Fully managed services for physicians at WELL-owned clinics
  • Ala carte solutions for independent practitioners

In Canada, WELL is the largest operator of outpatient clinics with 181 locations across four provinces, offering healthcare services. The U.S. division comprises CRH (gastrointestinal care and practitioner recruiting), Circle Medical (primary care/mental health), and Wisp (women’s telehealth). The technology segment includes WELL Provider Solutions (EMR systems, billing services, digital health marketplace) and WELL Cybersecurity.

Over the years, the company has grown through strategic acquisitions. Its sales have risen from 5.9 million in 2018 to $776.1 million in 2023. In the last 12 months, revenue has grown by 36.6% year over year to $957.7 million.

Well’s business model aims to address challenges in Canadian healthcare, a $344 billion industry struggling with fragmentation, underinvestment, and technological limitations.

A strong performance in Q3 of 2024

WELL Health reported solid numbers in the third quarter (Q3) of 2024, with sales of $251.7 million, up 23% year over year. The Canadian Patient Services segment rose by 35%, while U.S. Patient Services and SaaS Technology Services grew by 21% and 19%, respectively, in the September quarter. Notably, Well Health surpassed $1 billion in annualized run rate ahead of schedule while patient visits grew by 41% to 1.5 million.

Well Health’s strategic initiatives include a pipeline of 17 pending acquisitions worth over $100 million in revenues. Moreover, the company has expanded its service offerings by launching weight care and GLP-1 programs in Canada and the U.S.

Well’s U.S.-based platforms, Wisp and Circle Medical, showcased robust performance in Q3 with 35% and 61% revenue growth, respectively, and are currently under strategic review for a potential sale.

What is the target price for Well Health stock?

Well Health’s management plans to continue its share buyback program while reducing debt and minimizing share dilutions. Further, it aims to maintain a strong financial position, enabling continued funding of organic growth and future acquisitions through operational cash flows.

Looking ahead, WELL has raised its 2024 revenue guidance to $985-995 million and remains focused on enhancing profitability. It implemented a cost-cutting program that contributed to record adjusted earnings before interest, tax, depreciation, and amortization of $32.7 million in Q3 of 2024. It also generated $16.2 million in free cash flow in Q3.

Analysts tracking Well Health forecast it will grow sales from $776 million in 2023 to $1.11 billion in 2025. Further, free cash flow is estimated at $83 million in 2025, up from $58.33 million in 2023. So, priced at 20.2 times forward FCF, Well Health stock is not too expensive and trades at a 25% discount, given consensus price targets.

Should you invest $1,000 in First Capital Real Estate Investment Trust right now?

Before you buy stock in First Capital Real Estate Investment Trust, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and First Capital Real Estate Investment Trust wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

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 Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Tech Stocks

The letters AI glowing on a circuit board processor.
Tech Stocks

How I’d Allocate $10,000 to AI Stocks in Today’s Market

Shopify (TSX:SHOP) is one of Canada's most compelling AI stocks.

Read more »

Canada day banner background design of flag
Tech Stocks

The Top Canadian Stock to Buy With $5,000 in 2025

There are few Canadian stocks out there that offer the outlook of this tech stock, bound for more growth.

Read more »

ways to boost income
Tech Stocks

How I’d Invest $11,500 in Canadian Fintech Stocks to Revolutionize My Finances

Propel Holdings stock's recent dip could be a trading opportunity for long-term financial gains. Here's why the fintech stock is…

Read more »

Start line on the highway
Tech Stocks

Where I’d Invest $5,000 in Growth Stocks With Long-Term Potential Through 2030

DO you have $5,000 to invest to grow your wealth over the long term? These growth stocks could deliver strong…

Read more »

A shopper makes purchases from an online store.
Tech Stocks

Buy the Dip on the Return of Recession Stocks?

If a recession comes back, there are some stocks that could fair well afterwards. And this is one of the…

Read more »

data center server racks glow with light
Tech Stocks

April Opportunity: Where I’d Invest $7,000 in These 3 Tech Stocks Right Now

These tech stocks have solid growth potential and are trading at discounted valuation, providing a solid buying opportunity in April.

Read more »

The letters AI glowing on a circuit board processor.
Tech Stocks

If I Could Only Buy and Hold a Single U.S. Stock, This Would Be It

You don’t need 40 different stocks to build wealth. A few good ones can boost your portfolio, and this U.S.…

Read more »

cloud computing
Tech Stocks

2 Top Canadian Information Technology Stocks to Buy Right Now

These two Canadian information technology stocks are bargains amid the downturn in the broader market for long-term investors.

Read more »