Market Overview

KeyBanc Initiates Phreesia With Bullish Rating On Trend Of 'Healthcare Consumerism'

KeyBanc Initiates Phreesia With Bullish Rating On Trend Of 'Healthcare Consumerism'

Phreesia Inc’s (NYSE: PHR) stock is a way for investors to gain exposure to growing health care consumerism in the United States, according to KeyBanc Capital Markets.

The Analyst

KeyBanc’s Donald Hooker initiated coverage of Phreesia with an Overweight rating and a price target of $36.

The Thesis

Phreesia targets a total addressable market of around $7 billion and seems poised to sustain growth in the 20% range over the next several years, Hooker said in the note.

He mentioned that the company had generated more than 25% growth over the past three years, but this rate could decelerate due to tough comparisons.

Despite the slowdown, Phreesia may sustain around 20% growth, driven by “significant economies of scale to the bottom line,” Hooker wrote. He added that such drivers were visible at other SaaS and payment processing companies, like Shopify Inc (NYSE: SHOP), Square Inc (NYSE: SQ) and Litespeed POS.

The analyst pointed out that Phreesia had a recent win at Lafayette General, which gives “incremental confidence” in the company being able to compete for health systems that use one of the major EHR (electronic health record) software vendors.

Competition from EHR software vendors like Cerner Corporation (NASDAQ: CERN) may emerge in the mid- to long-term, but this would unlikely impact Phreesia’s near-term growth prospects, Hooker added.

Price Action

Shares of Phreesia were down 0.71% ti $30.98 at time of publication.

Latest Ratings for PHR

Oct 2020NeedhamInitiates Coverage OnBuy
Sep 2020DA DavidsonInitiates Coverage OnBuy
Sep 2020Raymond JamesMaintainsOutperform

View More Analyst Ratings for PHR
View the Latest Analyst Ratings


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Posted-In: Donald Hooker KeyBanc Capital MarketsAnalyst Color Health Care Price Target Initiation Analyst Ratings General

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