Phreesia Inc. (NYSE: PHR) Receives Overweight Rating from Piper Sandler with $30.00 Price Target
Piper Sandler reiterated its Overweight rating on Phreesia Inc. (NYSE: PHR) with a consistent price target of $30.00 following a substantial beat in F2Q adjusted EBITDA. The firm expressed a positive outlook on Phreesia's financial performance, citing strong additions in Active Healthcare Service Clients (AHSC) and solid Subscription Revenue yield as key drivers.
Phreesia's revenue slightly surpassed consensus expectations, balancing the anticipated weaker Payments Revenue. The company updated its FY25 adjusted EBITDA guidance while maintaining revenue outlook unchanged, and provided an early framework for FY26.
Piper Sandler's analysis indicates that by FY28, revenue growth and adjusted EBITDA margin could reach 30%, with Phreesia making strides towards this goal in FY26 and FY27. The firm anticipates a shift to a lower, yet stable, double-digit growth rate as profitability increases.
During the earnings call, Phreesia advised the market to prepare for an "initial descent" towards sustainable growth and profitability. Piper Sandler expects a smooth transition if consensus estimates adjust accordingly, reflecting confidence in Phreesia's growth trajectory and financial targets.
InvestingPro Insights:
Analysts have revised earnings upwards for Phreesia, signaling confidence in its financial trajectory. Despite this, analysts do not expect profitability this year, emphasizing long-term growth over immediate returns.
Phreesia is trading at a high Price / Book multiple of 5.87, reflecting a premium investors are willing to pay for its book value. The company also saw a 23.98% revenue growth in the last twelve months leading up to Q1 2025, with a strong return of 23.07% over the last three months, indicating positive market sentiment.
For deeper insights into Phreesia's performance and potential, visit InvestingPro for additional analysis on key financial indicators.
In summary, Phreesia's positive financial performance and growth trajectory, as highlighted by Piper Sandler and InvestingPro, indicate a promising future for the company. Investors should consider the company's strong revenue growth, profitability targets, and market sentiment when evaluating investment opportunities.