On Tuesday, BofA Securities initiated coverage on Waystar Holding (NASDAQ:WAY) stock with a Buy rating and a $27.00 price target. The firm's outlook on the cloud-based healthcare payments platform is positive, noting its significant expansion and the potential for continued growth.
Waystar has been recognized for its substantial growth, both organically and through strategic acquisitions, having completed nine purchases since 2018. The company has established a large footprint in the healthcare payments industry, processing over 5 billion payment transactions annually for more than 30,000 clients and over a million distinct providers.
The company is operating in a market valued at approximately $15 billion, which is expanding at a rate of around 5% per year. However, BofA Securities forecasts Waystar to outpace the market, projecting approximately 10% revenue growth and stable margins around 40% for the next three years.
The analyst from BofA Securities highlighted Waystar's potential to deepen its existing relationships with 18 of the top 22 hospitals in the United States. Additionally, anticipated shifts in the competitive landscape could provide further opportunities for Waystar to enhance its market position.
The Buy rating and price target are based on a 15x CY25 EV/EBITDA multiple, reflecting the firm's confidence in Waystar's capacity to continue its upward trajectory in the healthcare payments space.
In other recent news, Waystar Holding Corp. has seen a flurry of positive analyst attention. William Blair initiated coverage on the company's stock, forecasting a significant revenue rise for the fiscal years 2024 and 2025.
For the fiscal year 2024, the firm estimates that Waystar will achieve a total revenue of $885 million, and by 2025, the revenue forecast climbs to $971 million. Waystar also received an upgrade to 'Outperform' from Evercore ISI, highlighting the company's strong operating margins and organic growth history.
Goldman Sachs (NYSE:GS) initiated coverage on Waystar with a 'Buy' rating, noting the company's impressive adjusted EBITDA margins that exceed 40%. JPMorgan (NYSE:JPM) assigned an 'Overweight' rating to Waystar, pointing out its significant market presence and stable revenue cycle management functions. These are the latest developments for Waystar, reflecting a positive outlook from various financial firms.
InvestingPro Insights
As BofA Securities shines a spotlight on Waystar Holding's robust expansion and market potential, real-time data from InvestingPro provides additional context for investors. The company's market capitalization stands at $3.6 billion, illustrating its significant presence within the healthcare payments industry. Despite challenges, such as the current lack of profitability and a P/E ratio indicating market skepticism about near-term earnings, Waystar's revenue has grown by nearly 14% over the last twelve months as of Q1 2024, signaling a strong top-line performance.
One of the InvestingPro Tips suggests that Waystar is trading near its 52-week high, which could indicate a strong market confidence in the company's future prospects. However, another tip points out that analysts are not anticipating the company to be profitable this year, which investors may weigh against the growth potential highlighted by Bofa Securities.
For those considering Waystar as an investment, the InvestingPro platform offers additional insights, including an array of InvestingPro Tips that could further inform your decision. Currently, there are 6 more tips available on InvestingPro for Waystar, which can be accessed at https://www.investing.com/pro/WAY. To explore these valuable insights, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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