July 16, 2024

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Waystar Holding stock rated Buy by Goldman Sachs, strong growth in healthcare tech By Investing.com

3 min read

On Tuesday, Goldman Sachs initiated coverage on Waystar Holding (NASDAQ:WAY) stock, a technology firm operating within the healthcare sector. The financial institution assigned a Buy rating, alongside a price target of $32.00.

The new coverage comes as Goldman Sachs recognizes Waystar’s distinctive presence in the market, which is largely populated by vendors offering point-solution technology, manual processes, and various IT services. Waystar’s comprehensive technology platform is seen as a unique offering that spans across multiple stages of the healthcare revenue cycle.

Goldman Sachs highlights the strategic integration of Waystar’s assets as a key factor in its ability to forge strong partnerships with large hospitals and health systems. This approach is expected to facilitate ongoing market share gains in an industry that has traditionally faced difficulties due to a lack of holistic technology solutions.

Despite the challenging conditions over the past two to three years, Waystar has demonstrated a resilient growth pattern and has maintained strong net revenue retention. This performance is viewed as a testament to the company’s robustness and the defensibility of its business model.

The financial firm also points to Waystar’s impressive adjusted EBITDA margins, which exceed 40%. This financial metric is considered to offer a strong valuation support when compared to its industry peers, suggesting a favorable outlook for Waystar’s financial health and stock performance.

In other recent news, Waystar Holding has been assigned an Overweight rating by JPMorgan, with a set price target of $24.00. This development comes as Waystar maintains a significant market presence, particularly in revenue cycle management (RCM) services, which are deemed crucial for healthcare providers amidst various budgetary pressures.

JPMorgan’s analysis indicates that industry growth is anticipated to contribute to half of Waystar’s targeted 10% compound annual growth rate (CAGR) in revenue. The stability and longevity of the company’s end-market demand further reinforce the Overweight rating.

Waystar’s business operations aim to uphold a steady 40% margin target, earning it a fifth-place ranking based on a rule of 40 basis within JPMorgan’s coverage universe. Despite a growth profile that may not be as aggressive as some of its peers, Waystar is expected to experience relatively less volatility in its financial results, bolstered by supportive underlying market drivers. These are among the recent developments concerning Waystar.

InvestingPro Insights

Goldman Sachs’ optimistic outlook on Waystar Holding is shared by some of the metrics available on InvestingPro. With a market capitalization of $3.6 billion and a gross profit margin of 67.77% in the last twelve months as of Q1 2024, Waystar displays a strong financial stance in the healthcare technology sector. Additionally, the company has seen a robust revenue growth of 13.98% during the same period, which aligns with Goldman Sachs’ view on the company’s resilient growth pattern.

InvestingPro Tips suggest caution, as Waystar’s stock is currently trading near its 52-week high, with the price at 93.16% of this peak, and the company has not been profitable over the last twelve months, with a P/E ratio of -64.34. Furthermore, Waystar does not pay a dividend to shareholders, which may be a consideration for income-focused investors.

For those looking to delve deeper into Waystar’s financials and future prospects, there are additional InvestingPro Tips available at Use the exclusive coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, and gain access to a comprehensive list of tips that can help in making a more informed investment decision.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.


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