Healthcare technology company CloudMD Software & Services Inc. (DOCRF) has delivered a robust set of numbers for the first quarter. It operates via three segments: Clinics and Pharmacies; Digital Solutions; and Enterprise Health Solutions.
Revenue jumped 372% year-over-year to C$41.4 million on the back of organic growth in the Employee Health Solutions division and the contribution from the company’s acquisitions made over the past year (MindBeacon).
On the other hand, the gross margin dropped to 32.5% from 40.9% a year ago due to a changing revenue mix. Nonetheless, the net loss per share of the company narrowed to C$0.02 from C$0.03 in the comparable year-ago period.
Management Weighs In
Interim CEO and President of CloudMD, Karen Adams, commented, “Innovation remains a key company focus with the launch of our newly branded integrated personalized connected health platform, Kii. We remain focused on cost control, realizing synergies, and profitable execution. We have a strategic plan that focuses on leveraging our core assets, maximizing returns for our clients and shareholders, and achieving sustained profitability.”
The company currently caters to 5,700 clinicians and covers 12 million individuals across North America. For 2022, it is prioritizing organic growth by diversifying and growing its client base, achieving geographic expansion, and achieving lower customer acquisition costs.
Additionally, it also plans to undertake a strategic review of smaller, non-core assets to maximize value for shareholders.
Analyst’s Take
Echelon Wealth Partners’ Rob Goff has reiterated a Buy rating on the stock alongside a price target of $2.56.
Overall, the Street has a Moderate Buy consensus rating on CloudMD based on two unanimous Buys. The average CloudMD price target of $1.87 implies a massive 478.68% potential upside. That’s after a 65.2% slide in share prices so far this year.
Closing Note
CloudMD has delivered superior numbers for the first quarter. The company’s focus on geographic expansion, increasing client base, and optimizing costs should further propel this performance. The near 5x upside seen by Wall Street definitely makes the stock attractive at current levels.
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