Well Health Technologies stock is set to rebound as profitability nears

  • June 30, 2022

Well Health Technologies (TSX: WELL) has outperformed other telehealth companies in the telehealth industry in 2020. While competitors like Doximity, Hims & Hers, and Teladoc have been hit badly, Well has fared significantly better thanks to a strong set of acquisitions. 

Well Health growth continues

Well Health Technologies provides telehealth and outpatient services in Canada and the United States. Founded in 2010, the company has experienced strong growth and quickly become a leading player in the health industry. It has grown both organically and through acquisitions. 

The most recent acquisition happened in June when the company bought INLIV, an omnichannel provider of primary care, consumer preventative, and corporate healthcare. It paid over $1.6 million for the purchase.

While the Well Health Technologies stock price has dropped this year, recent results show that the company is doing well. Its revenue surged to $302 million in the year to December compared to the $50.2 million it made in the previous year. Its virtual services revenue rose to $75.6 million, a 450% growth from the previous year.

Is Well a good buy?

Analysts expect that the company will experience similar or even better growth in 2022. That’s because, unlike Teladoc that focuses purely on telehealth, Well has a strong presence in outpatient and primary care. At the same time, its recent acquisitions will help accelerate this growth.

Meanwhile, the company is accelerating its ESG credentials, which could see it attract more demand from ESG-focused funds. It recently published its first report on ESG. While ESG commitments can be vague often, the company seems committed to making its goals a reality. In a statement, the CEO said:

“We are proud to introduce our inaugural ESG Report that showcases our commitments, efforts, and responsibilities to drive real positive societal change for all of our stakeholders.”

Another catalyst for Well is the management’s focus to become profitable after spending the past few years on acquisitions. In its most recent earnings call, the management said that they expect the company to be profitable in 2022. If the management is correct, it will be a significant milestone for the firm as many telehealth firms lack a clear path to profitability in the coming years.

Well Health stock price forecast

The ongoing sell-off in global equities will present an opportunity to scoop quality stocks. Well could be one of them. On the chart below, we see that the shares have been in a strong bearish trend in the past few months. 

The stock managed to move below the important support at $3.77, which was the lowest point in January. It remains below the 25-day and 50-day moving averages while the Relative Strength Index is at the neutral point at 50. Therefore, there is a likelihood that the shares will bounce back in the coming months as investors attempt to retest the key resistance at $5.

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