HCAT - Health Catalyst falls as Evercore ISI downgrades on health system outlook

• Health Catalyst ( NASDAQ: HCAT ), a vendor of software solutions to healthcare establishments, dropped Tuesday after Evercore ISI downgraded its shares to In-Line from Outperform, citing a challenging setup for health systems, including hospitals.
• “While it is not new that hospitals are under financial pressure, 2023 is likely to bring additional pressures to health system IT (cost inflation and labor constraints),” the analyst Elizabeth Anderson wrote, lowering the HCAT price target to $11 from $10 per share.
• In a year, the company’s professional services segment is expected to play a leading role, the analyst thinks that low-margin revenue could dominate Health Catalyst’s ( HCAT ) revenue mix as health systems slow down their large-scale tech investments.
• In Q3 2022, the company reported $24.4M revenue from professional services with ~4% YoY growth, while its technology revenue climbed ~15% YoY to $44.0M.
• Health Catalyst ( HCAT ) has lost more than ~74% over the past 12 months. However, Seeking Alpha contributor, Biologics has reasons to believe that the company “has the ability to make a turnaround and regain its momentum.”

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