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With the rising acceptance of telehealth services amid COVID-triggered lockdowns, digital health stocks have noted quite a spike in popularity as well. Among them, Vancouver-based online healthcare provider WELL Health Technologies (TSX:WELL) has been particularly in demand.
WELL Health stocks on the Toronto Stock Exchange (TSX) secured a notable growth of nearly 186 per cent in the last 12 months, and surged by 202 per cent from its 52-week low of C$ 2.58 (June 24, 2020). The company has also made quite a few significant acquisitions and expansions in terms of its technologies in the last few years, drawing investor as well as analyst attention.
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Most recently, the telehealth firm has created a buzz in the stock market biosphere around a potential new listing in the US.
The speculations stemmed from strong roots. WELL Health, in its first quarter 2021 earnings call, is said to have noted that it is working with Californian law firm Fenwick & West on an initial public offering (IPO) in the US, expected to take place in the fourth quarter of this year. Reports claim that the listing is expected to be on the Nasdaq platform.
Fenwick & West has quite a track record when it comes to IPOs in the US. The firm headed Facebook’s (NASDAQ:FB, FB:US) historic IPO in 2012 and, most recently, was involved in cryptocurrency exchange Coinbase’s landmark listing. Fenwick’s major clientele also include big names like Amazon Inc (NASDAQ:AMZN, AMZN:US) and Cisco (NASDAQ: CSCO, CSCO:US).
Needless to say, WELL’s involvement with this law firm and the whole conversation around its potential listing in the US has gotten investors quite interested in the stock.
WELL Health Technologies (TSX:WELL) Stock & Financial Performance
WELL Health presently holds a market cap of C$ 1.53 billion, with a price-to-book (P/B) ratio of 7.091 and a price-to-cash flow ratio (P/CF) of 28.1. In terms of its trading performance, WELL saw an average of about 1.5 million of its stocks exchange hands in the last 10 days, as against that of 1.2 million in the past month.
While TSX-listed WELL stock dwindled by about three per cent this year, it reflects a growth of nearly 13 per cent for the past month.
The Vancouver-based firm saw a record revenue surge of 150 per cent year-over-year (YoY) to C$ 25.6 million in Q1 2021. While the company aims to attain organic growth across operations this year, some Bay Street analysts project that WELL Health may see a substantial jump in its top line in 2022.
Experts have also noted that shares of WELL Health appear to be “undervalued” in comparison to fellow digital health industry players in the US.
Going by the argument that WELL Health could be trading at a lower value than its US-listed peers, despite its growing business and revenue, its investor interest could expand significantly ahead of a potential listing south of the border.
The above constitutes a preliminary view and any interest in stocks should be evaluated further from investment point of view.
