WELL:CC - 2 Reasons to Keep WELL Health Stock on Your Watch List
2024-05-02 15:45:00 ET
If there is one pandemic stock that investors continue to see suffer in their portfolio, the top of that list should include WELL Health Technologies ( TSX:WELL ). The healthcare tech stock looked so promising when the pandemic hit. Here was a way for patients to receive care from their homes, remaining safe while the COVID-19 pandemic raged.
However, after restrictions eased, WELL stock’s share price plummeted. The question, though, was whether this was from anything wrong the stock had done. In short, no.
Even so, investors are quite wary of getting back into WELL stock. If this is you, I recommend considering at least adding it to your watchlist. Here’s why.
Still strong
Despite the drop in share price, WELL Health stock continues to offer a strong financial position. The company has been actively expanding its presence in the healthcare market through strategic acquisitions. These acquisitions have not only expanded its customer base but also diversified its revenue streams. Investors may see potential in the company’s ability to continue making smart acquisitions and integrating them effectively into its operations.
More recently, it’s now focusing on organic growth. But overall, the acquisitions have done well and put WELL Health stock in a strong financial position. For that, we can see how the company has performed time and again in the last few quarters.
The second-quarter results last year brought in quarterly revenue of $170.9 million as well as adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $27.8 million. This is an important factor when determining the stock’s core profitability. In fact, the company upgraded its guidance for 2023, expecting to achieve revenue between $740 and $760 million.
By the third quarter, the company climbed higher, with revenue of $204.5 million and adjusted EBITDA at $28.2 million. It upgraded guidance again to $755 to $765 million, hitting above $900 million by 2024. The fourth quarter saw it beat that guidance, achieving $776 million in annual revenue and $231.2 million in quarterly revenue. Further, adjusted EBITDA was $30.8 million.
Long-term growth
Yet even as the company sees record growth, reports momentum, and surges past estimates, investors seem uninterested. Perhaps they fear the company has lower long-term potential, but that doesn’t seem to be the case.
In fact, healthcare is a fundamental sector of the economy, and demographic trends, such as an aging population and increasing healthcare expenditures, bode well for companies operating in this space. Investors looking for long-term growth opportunities may find WELL Health stock’s focus on digital healthcare appealing.
What’s more, WELL Health stock is known for its innovative use of technology in healthcare delivery. Its digital platform offers a range of services, including virtual consultations, electronic medical records management, and patient engagement tools. Investors may view the company’s technological capabilities as a competitive advantage in the evolving healthcare landscape.
Despite the recent decline in stock price, WELL Health stock operates in the rapidly growing telehealth and digital healthcare sector. The demand for telemedicine services has surged due to the COVID-19 pandemic, and this trend is likely to continue as more people seek convenient and accessible healthcare solutions. So, with shares down to a fraction of all-time highs, it’s one I would certainly consider adding to any watchlist.
The post 2 Reasons to Keep WELL Health Stock on Your Watch List appeared first on The Motley Fool Canada .
Fool contributor Amy Legate-Wolfe has positions in Well Health Technologies. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .
2024