Last Update 22 Feb 26

Fair value Decreased 13%

WEAV: Payments And New Offerings Are Expected To Support Gradual Re Rating

Analysts have trimmed their price targets on Weave Communications, leading to an updated target of $8.75 from $10.08, citing slightly softer long term growth and margin assumptions, even as they highlight ongoing growth in payments, new locations, and the contribution from the TrueLark acquisition.

Analyst Commentary

Recent research updates on Weave Communications point to a mixed setup, with trimmed price targets but continued confidence in the business model, product adoption, and path toward better profitability.

Bullish Takeaways

Bullish analysts are maintaining positive ratings even as they cut targets, which signals that they still see upside potential relative to current trading levels.
The latest quarter showed 17% year over year growth, supported by payments, new location additions, and the TrueLark acquisition. Analysts view this as supportive for execution on growth initiatives.
FY26 top line growth guidance of 14.8% year over year is described as roughly in line with consensus. This suggests current expectations are not being reset sharply lower.
Guidance that points to 190 bps of operating margin expansion in the coming year is seen as progress toward improved profitability, which is a key input for valuation support.

Bearish Takeaways

Multiple analysts have trimmed price targets into a US$8 to US$10 range, which reflects more cautious assumptions around growth and margins than before.
One firm shifted its rating to Outperform from Strong Buy, citing timing of expected catalysts and a more difficult environment in SMB software. This may limit how quickly the shares can re rate.
Analysts highlight that a full re rating is unlikely until there is clearer evidence of organic re acceleration or a more consistent path toward long term profitability.
FY26 guidance implying slower growth than FY25 is viewed as a potential headwind for higher valuation multiples if the company does not offset it with stronger margin performance or new growth drivers such as AI and specialty medical offerings.

What's in the News

Weave announced a partnership with Synchrony to integrate CareCredit into its platform, allowing practices to view a patient's CareCredit status and available funds directly in Weave and initiate payments in office or via text to pay, with the goal of simplifying financing conversations and reducing deferred care (Client Announcements).
The company issued earnings guidance for the first quarter ending March 31, 2026, with expected total revenue of US$64.2 million to US$64.8 million, and for the full year 2026 with expected total revenue of US$273.0 million to US$276.0 million (Corporate Guidance).
Weave introduced Weave Insurance Eligibility, which uses Robotic Process Automation to pull real time data from insurance portals, aiming to reduce front office administrative work, support cleaner claim submissions, and give patients clearer out of pocket estimates at the point of care (Product Related Announcements).
In feedback from customers using Weave's payment product alongside other payment services, 43% indicated they would be willing to use Weave's payment services exclusively if CareCredit were included, highlighting how the CareCredit integration may influence future payment mix within Weave's customer base (Client Announcements).

Valuation Changes

Fair Value: trimmed from $10.08 to $8.75, a reduction of roughly 13% in the modelled price target.
Discount Rate: edged higher from 8.68% to 8.73%, reflecting a slightly higher required return in the updated assumptions.
Revenue Growth: adjusted from 14.49% to 14.20%, a modest pullback in the long term growth outlook.
Net Profit Margin: reset from 12.35% to 11.39%, indicating a slightly more cautious view on future profitability.
Future P/E: moved down from 27.66x to 24.40x, pointing to a lower valuation multiple being applied in the latest models.

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Key Takeaways

Adoption of AI-powered products and expansion into healthcare verticals are expected to boost recurring revenue, customer retention, and revenue per user.
Improved operating efficiencies, scalable margins, and SMB demand for unified communication platforms will drive stronger earnings and free cash flow.
Limited adoption, industry consolidation, vertical concentration, and rising competition threaten growth, revenue stability, and margins as higher R&D costs challenge long-term profitability.

Catalysts

About Weave Communications

Provides a customer experience and payments software platform for small and medium-sized healthcare businesses in the United States and Canada.What are the underlying business or industry changes driving this perspective?

Rapid integration and cross-selling of the AI-powered TrueLark platform and new product bundles, alongside continued payment solution expansion, are expected to accelerate revenue growth by increasing average revenue per user and boosting recurring transaction volumes.
Expansion into specialty medical and other adjacent healthcare verticals (with under 1% current market share but significant integration progress), coupled with a demonstrated ability to raise ASP and reduce churn as product-market fit matures, suggests material future revenue upside and improved customer retention.
Ongoing investments in AI-driven workflow automation (e.g., intelligent scheduling, reminders, and call intelligence features) are expected to deliver increased operating efficiencies for customers, supporting value-based price increases and driving net margin expansion over time.
Increasing consolidation of point solutions by SMBs in favor of unified, cloud-based communication platforms plays to Weave's strengths, supporting higher customer retention and long-term growth in recurring revenue and earnings as digitalization accelerates across the health care SMB market.
Operating leverage is increasingly apparent, with gross margins expanding and G&A as a percentage of revenue declining; as revenue continues to scale, further efficiency gains should drive improvement in operating income and free cash flow.

Weave Communications Earnings and Revenue Growth

Weave Communications Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Weave Communications's revenue will grow by 15.2% annually over the next 3 years.
Analysts are not forecasting that Weave Communications will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Weave Communications's profit margin will increase from -13.6% to the average US Software industry of 13.1% in 3 years.
If Weave Communications's profit margin were to converge on the industry average, you could expect earnings to reach $44.2 million (and earnings per share of $0.49) by about September 2028, up from $-30.1 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 32.3x on those 2028 earnings, up from -19.5x today. This future PE is lower than the current PE for the US Software industry at 36.6x.
Analysts expect the number of shares outstanding to grow by 5.86% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.67%, as per the Simply Wall St company report.

Weave Communications Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Slower-than-expected adoption of integrated and AI-powered features, especially among single-location and less tech-forward practices, could limit the ability to move customers up to higher-priced bundles and slow average revenue per user (ARPU) growth, impacting top-line revenue and margin expansion.
Heavy customer concentration remains within dental, optometry, and newly-penetrated specialty medical, exposing Weave to vertical-specific risks such as shifts in healthcare regulations, reimbursement changes, and payer-provider dynamics; this could lead to revenue instability and increased churn if sector headwinds emerge.
Rapid industry consolidation among independent healthcare practices and expansion of larger health networks (e.g., DSOs acquiring single-location offices) could reduce Weave's core SMB customer pool over time, hindering long-term revenue growth and jeopardizing net revenue retention rates.
Growing competition from larger, integrated SaaS vendors and all-in-one practice management platforms with communication, scheduling, and payments built in may intensify pricing pressure and customer churn, making it more difficult for Weave to maintain premium pricing and healthy margins, directly affecting earnings.
Ongoing need for substantial integration work, product enhancements, and engineering hiring to serve additional verticals and maintain competitive differentiation may increase R&D costs faster than revenue growth, risking operational leverage and putting pressure on net margins and overall profitability.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $12.214 for Weave Communications based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $15.0, and the most bearish reporting a price target of just $9.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $337.6 million, earnings will come to $44.2 million, and it would be trading on a PE ratio of 32.3x, assuming you use a discount rate of 8.7%.
Given the current share price of $7.61, the analyst price target of $12.21 is 37.7% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

WEAV: Integration With Major Healthcare Platform Will Drive Efficiency Gains