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Technology companies like Well Health Technologies (TSX:WELL) are changing the world for the better. As a result, demand and expectations are high. Well Health Technologies reported first-quarter earnings that reflected this. Accordingly, Well Health Technologies stock has increased 7% since then.
Here's what you need to know:
Well Health momentum remains strong
The first quarter was the 21st consecutive record breaking quarter. Patient visits soared 34% over the previous year, sales increased 36.7% to $231 million, and organic growth increased 13.5%. As a result, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) increased 6.1% to $28.3 million. Finally, adjusted earnings per share (EPS) came in at 0.08 cents, compared to last year's 0.06 cents, and the consensus estimate of -$0.04 for his EPS.
Beyond this clearly strong momentum, the company has shown that it is ready and capable of increasing its focus on shareholder returns. That's what every investor wants to hear, and it's delivered exactly on time. This means making better use of increasing free cash flow. Free cash flow increased 11% in the quarter, and for the year, management expects free cash flow to increase 30% to $50 million.
Management also committed to reducing stock-based compensation and increasing share buybacks, effectively reducing or eliminating dilution in Well Health stock.
Canada's primary care market is a huge opportunity for Well Health
The Canadian primary care market is a significant market for Well Health in terms of future growth and opportunity. This is because the market is very large and highly fragmented, with Well Health having only 1% market share. Also, Well Health faces little competition at this point.
First-quarter primary care revenue increased 83% to $45.3 million. Management expects him to have revenues of more than $300 million in 2024 and expects him to exceed $1 billion in the not-too-distant future. This assumes Well Health has his 10% market share at that time.
As you can see, this opportunity is significant, and Well Health is getting there quickly.
Artificial intelligence to enhance healthcare
Another very interesting aspect of the Well Health story is the opportunity to use artificial intelligence (AI) to improve healthcare, from efficiency to disease detection and management to patient care. An example of this is AI Voice for transcription, which effectively eliminates human error and cost in the transcription process. There's also AI Inbox Administration, an automation software that automatically files faxes into charts.
These AI-powered processes sound simple, but using them every day can reduce costs, increase efficiency, and reduce workload so healthcare professionals can focus more on patient care. It will look like this.
But the most appealing potential of AI is its ability to directly improve patient outcomes. For example, AI Decision Support can act as a co-pilot for a doctor. Enable risk stratification, leveraging clinical data and AI to screen and discover patients at risk for over 100 different chronic and rare diseases. This could dramatically improve patient outcomes.
conclusion
As you can see from this article, I feel very optimistic about Well Health Technologies from many different angles. From business value to improved financial health, I think Well Health is really in the right place right now.
In my view, this should drive Well Health Technologies stock significantly higher over the next few years.
