Health Catalyst (HCAT) Jumps On Q4 Report
Health Catalyst (HCAT) reported last night that Q4 revenue rose 20.6% to $43.5 million (beating by $1.7 million) and that adjusted EPS of -$0.21 beat by $0.07. Management also issued 2020 guidance for 19% to 21% growth (revenue of $185 million to $186 million) that is in-line with analyst consensus. As discussed in my report, this is an extremely stable business with over 90% of revenue essentially locked in, though there could be upside potential if Health Catalyst is able to convert/cross-sell into the Medicity customer base, which faces a big renewal cycle this summer. On that note, there were three conversions in the quarter, and it looks like the bigger cross-sell opportunity will be (hopefully) realized in Q3 and Q4 of 2020.
Stepping back, this report was good enough to send the stock up almost 10% today. Granted, that’s coming off a depressed level so it’s not exactly a victory. But still, a little strength here is welcome and some carry through is likely if the market can bounce back a little next week. On that note, the Nasdaq closed up (barely) today!
Let’s keep HCAT at hold for now and evaluate the stock again next week. HOLD