Valued at a market cap of over $1 billion, Well Health (TSX:WELL) stock has returned more than 3,500% to shareholders since its initial public offering in April 2016. Despite these market-beating gains, the small-cap TSX stock is down 57% below all-time highs, allowing you to buy the dip.
WELL Health is a Canadian digital healthcare company that provides omni-channel patient services across multiple medical specialties and operates clinics.
It develops and sells technology solutions, including electronic medical records, telehealth platforms, AI-powered tools, practice management software, and billing services to healthcare practitioners in Canada, the US, and internationally.
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Is Well Health stock a good buy right now?
Well Health has increased its revenue from $10.6 million in 2018 to $919.7 million in 2024. It delivered another strong quarter in Q3 with revenues climbing 56% year-over-year to $365 million, though the headline numbers mask a more complex story unfolding beneath the surface.
The Canadian digital healthcare company has reached an inflection point, with its core domestic business firing on all cylinders while management races to exit underperforming U.S. assets.
Patient visits topped one million for the second straight quarter, reaching 1.1 million in the third quarter, up 38% from the prior year. More importantly, the network now includes over 1,300 physicians, representing about 1% of all doctors practicing in Canada. Management is targeting a 10% market share within eight to ten years, which indicates the growth story is far from over.
Well logged 524 patient visits per billable provider in the quarter compared to 441 a year earlier, a 19% jump that demonstrates the technology platform is making doctors more productive rather than just piling on more physicians. The company is now recruiting nearly as many doctors as it onboards through acquisitions, a key milestone that suggests the brand is gaining traction.
Growth ahead
Adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) hit $59.9 million for the quarter, though this figure includes $17.6 million from Circle Medical deferred revenue recognition. Strip that out, and EBITDA was $42.3 million, still up 180% year-over-year.
Gross margins improved by 510 basis points to 45.5% as the business mix shifted toward higher-margin offerings like executive health clinics and software services.
The company’s acquisition pipeline continues to expand with $235 million in clinics under signed letters of intent, up from just $48 million three months ago. This aggressive expansion plan appears timed to coincide with planned divestitures of U.S. assets, including WISP, Circle Medical, and the CRH anesthesia business.
WELLSTAR, the company’s software subsidiary, raised $62 million at a $535 million valuation and is positioned for a potential IPO on the Toronto Stock Exchange in early 2026. The unit generated $18.3 million in revenue during the quarter with 35% EBITDA margins, demonstrating the profitability potential of the software business compared to clinic operations.
Is the TSX stock undervalued?
Analysts tracking WELL stock forecast revenue to increase to $1.8 billion in 2028. It is forecast to end 2028 with a free cash flow of $177.5 million, up from $84 million in 2025.
If WELL stock is priced at 15 times forward earnings, which is quite reasonable, it could surge 160% over the next two years. Given consensus price targets, the small-cap stock trades at a 91% discount in December 2025.
