Update shared on30 Aug 2025
Fair value Decreased 15%Health Catalyst's price target has been cut as analysts cite persistent operating headwinds, declining revenue outlook, customer churn, market structural challenges, and heightened uncertainty from a CEO transition, resulting in a downward revision of fair value from $5.33 to $4.56.
Analyst Commentary
- Weak first-half 2025 bookings and a reduction in revenue guidance, implicating lower net revenue retention and increased customer churn.
- Removal of all organic growth from financial outlook as management now expects year-over-year revenue declines into 2026.
- Persistent, multi-year headwinds in the operating environment, with ongoing macroeconomic challenges limiting growth potential.
- Structural end-market issues, including pressure from pending Medicaid funding cuts and potential disintermediation of Health Catalyst's solutions due to AI-driven in-sourcing.
- Uncertainty related to leadership transition, following the announced retirement of long-time CEO, contributes further to a cautious stance on the stock.
What's in the News
- Health Catalyst launched Market Insights on Salesforce AppExchange, expanding access to actionable consumer insights directly within Salesforce workflows for healthcare clients.
- Announced impairment charges with a $28.8 million goodwill write-down for Q2 2025.
- Provided Q3 guidance of approximately $75 million in revenue and $310 million for the full year 2025.
- CEO Dan Burton will step down, effective June 2026, after 15 years of leadership, remaining on the Board during the transition.
- Dropped from multiple Russell growth and small cap indexes, including Russell 2000 Growth and Russell 3000 Growth, as of late June 2025.
- Listed 10 AI-integrated data toolkits for healthcare organizations on Databricks Marketplace, enhancing access to advanced analytics and AI solutions.
Valuation Changes
Summary of Valuation Changes for Health Catalyst
- The Consensus Analyst Price Target has significantly fallen from $5.33 to $4.56.
- The Consensus Revenue Growth forecasts for Health Catalyst has significantly fallen from 8.4% per annum to 0.4% per annum.
- The Future P/E for Health Catalyst has risen from 17.12x to 18.33x.
Disclaimer
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