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Definitive Healthcare Corp (DH)
NASDAQ:DH
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Definitive Healthcare Corp
(NASDAQ:DH)
44Neutral
Positive Factors
New Partnerships
Definitive did continue to win new logos in the quarter, across business segments, including a new partnership with a leading business data and analytics company.
Profitability Management
Management was able to deliver 150 bps of year-over-year FCF margin expansion in what was a no-growth year in 2024.
Negative Factors
Churn Challenges
Churn continues to be a challenge. DH closed the year with significant churn in 4Q:24.
Operating Leverage
The company expects adjusted EBITDA margin of approximately 27% down from approximately 31% in 2024, reflecting negative operating leverage.
Revenue Decline
Revenue is still expected to decline y/y for 2025E.
Definitive Healthcare Corp (DH) vs. S&P 500 (SPY)
Market Cap
$450.77M
Dividend YieldN/A
Average Volume (3M)1.15M
Price to Earnings (P/E)―
Beta (1Y)2.22
Revenue Growth0.31%
EPS Growth-99.23%
CountryUS
Employees782
SectorHealthcare
Sector Strength64
IndustryMedical - Healthcare Information Services
Share Statistics
EPS (TTM)-3.53
Shares Outstanding112,911,320
10 Day Avg. Volume992,111
30 Day Avg. Volume1,147,181
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.26
Price to Cash Flow (P/CF)9.80
P/FCF Ratio6.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$4.83Price Target Upside63.18% Upside
Rating ConsensusHold
Number of Analyst Covering8
Definitive Healthcare Corp Business Overview & Revenue Model
Company DescriptionDefinitive Healthcare Corp (DH) is a leading provider of comprehensive healthcare commercial intelligence solutions. The company operates primarily in the healthcare sector, offering a robust platform that integrates data and analytics to deliver actionable insights for healthcare providers, pharmaceutical companies, medical device manufacturers, and other stakeholders. Its core products include data analytics tools and software solutions that enable clients to understand market trends, optimize operations, and drive strategic growth.
How the Company Makes MoneyDefinitive Healthcare Corp generates revenue through a subscription-based model, offering access to its proprietary healthcare data and analytics platform. Clients pay recurring fees to use the platform, which provides them with valuable intelligence on healthcare providers, payers, and other key market players. The company's revenue streams are bolstered by offering customized solutions and consulting services tailored to the specific needs of its clients. Additionally, Definitive Healthcare may engage in partnerships with other healthcare and technology companies to enhance its data offerings and expand its market reach, further contributing to its earnings.
Definitive Healthcare Corp Financial Statement Overview
Summary
Definitive Healthcare Corp shows revenue growth and a strong balance sheet with low leverage. However, profitability is a concern with negative margins and net income. Cash flow is improving but operational inefficiencies persist.Income Statement
Definitive Healthcare Corp has shown a consistent increase in total revenue over the years, with a revenue growth rate of 0.31% from 2023 to 2024. However, the company faces challenges with profitability, as indicated by negative EBIT and EBITDA margins, along with a negative net profit margin of -163.78% in 2024. These factors highlight significant profitability concerns despite revenue growth.45
Neutral
Balance Sheet
The company maintains a relatively low debt-to-equity ratio of 0.02 in 2024, indicating low leverage which is a positive aspect. However, the return on equity remains negative at -68.04%, signaling inefficiencies in generating profits from equity. The equity ratio stands at 55.75%, showing a strong equity position relative to total assets.55
Neutral
Cash Flow
Free cash flow improved from $38.2 million in 2023 to $58.2 million in 2024, reflecting strong free cash flow growth. The operating cash flow to net income ratio is positive, indicating better cash generation capabilities relative to reported net losses. However, the company still faces challenges with profitability, as indicated by the persistent net losses.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 252.20M | 251.41M | 222.65M | 166.15M | 118.32M | Gross Profit |
| 197.47M | 203.93M | 180.03M | 125.47M | 87.85M | EBIT |
| -710.82M | -329.80M | -23.14M | -18.69M | -10.67M | EBITDA |
| -567.24M | -241.23M | 23.44M | 23.05M | 44.91M | Net Income Common Stockholders |
| -413.12M | -202.39M | -22.25M | -61.26M | -87.65M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 290.16M | 308.07M | 331.87M | 387.50M | 24.77M | Total Assets |
| 1.09B | 1.83B | 2.12B | 2.12B | 1.75B | Total Debt |
| 9.99M | 267.93M | 275.85M | 270.68M | 461.88M | Net Debt |
| -95.38M | 136.95M | 128.91M | -116.81M | 437.10M | Total Liabilities |
| 482.19M | 626.73M | 633.77M | 612.73M | 549.80M | Stockholders Equity |
| 607.19M | 861.36M | 952.14M | 873.21M | 1.20B |
| Cash Flow | Free Cash Flow | |||
| 58.20M | 38.21M | 27.25M | 18.48M | 21.82M | Operating Cash Flow |
| 58.20M | 41.19M | 35.58M | 25.21M | 23.22M | Investing Cash Flow |
| -26.41M | -31.78M | -248.90M | -46.73M | -23.86M | Financing Cash Flow |
| -56.75M | -25.58M | -26.70M | 384.37M | 16.66M |
Definitive Healthcare Corp Technical Analysis
Neutral
2.96
Price Trends
4.08
Negative
4.22
Negative
4.48
Negative
Market Momentum
-0.36
Negative
38.04
Neutral
78.83
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DH, the sentiment is Neutral. The current price of 2.96 is above the 20-day moving average (MA) of 2.81, below the 50-day MA of 4.08, and below the 200-day MA of 4.48, indicating a neutral trend. The MACD of -0.36 indicates Negative momentum. The RSI at 38.04 is Neutral, neither overbought nor oversold. The STOCH value of 78.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DH.
Definitive Healthcare Corp Risk Analysis
Definitive Healthcare Corp disclosed 74 risk factors in its most recent earnings report. Definitive Healthcare Corp reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Definitive Healthcare Corp Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Performance Comparison
DH
Definitive Healthcare Corp
2.96
-5.11
-63.32%
HSTM
HealthStream
32.09
5.53
20.82%
OMCL
Omnicell
35.35
6.12
20.94%
Definitive Healthcare Corp Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: -39.84% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Neutral
The call highlighted strong cash flow performance and new business acquisition, supported by strategic data partnerships and leadership expansion. However, significant challenges remain with revenue decline, elevated churn, and pressure on renewal rates, particularly in the life sciences sector.Highlights
Strong Cash Flow Performance
Unlevered free cash flow performance was strong with 92% conversion from adjusted EBITDA, up 6% year-over-year on a dollar basis.
New Business and Logo Acquisition
Secured new business with new logos and upsell/cross-sell activity, indicating positive results in new logo growth.
Strategic Data Partnership
Partnership provides enhanced data capabilities, including identity graph, consumer data, and improved matching algorithms, supporting both master data management and digital activation strategies.
Leadership Team Expansion
Promotion of Casey Heller to Chief Financial Officer and hiring of a new head of engineering, technology, and data strategy.
Lowlights
Revenue Decline
Total revenue was $62.3 million, down 6% year-over-year, primarily due to customer retention challenges.
Elevated Churn Rates
Churn remained elevated, particularly in the life sciences sector, with net dollar retention for enterprise customers at 90% and overall at 85%.
Adjusted EBITDA Decrease
Adjusted EBITDA was $17.5 million, down 12% year-over-year, with a decrease in adjusted EBITDA margin to 28%.
Pressure on Renewal Rates
Renewal rates are not yet back to desired levels, especially for life science customers, impacting future revenue visibility.
Company Guidance
During the Q4 2024 earnings call, Definitive Healthcare provided detailed financial guidance and updates on their strategic initiatives, despite operating in a challenging macroeconomic environment. The company's total revenue for the fourth quarter was $62.3 million, representing a year-over-year decline of 6%, attributed to ongoing customer retention challenges. The adjusted EBITDA was $17.5 million, reflecting a 12% decrease, with an adjusted EBITDA margin of 28%. Despite these pressures, the company maintained a strong unlevered free cash flow conversion of 92% from adjusted EBITDA. For 2025, Definitive Healthcare expects full-year revenue to range between $230 million and $240 million, indicating a 5% to 9% decline year-over-year. The company is focusing on four strategic pillars to improve its value proposition: differentiated data, data delivery and integration, customer success, and digital engagement. Additionally, they are making organizational changes such as integrating sales and customer success teams and enhancing their data science capabilities. The guidance also notes that Q1 will be the lowest point of the year, anticipating revenue between $55.5 million and $57 million, with an adjusted EBITDA margin of 19% to 20%. The company aims for sequential growth in subsequent quarters, driven by full quarterly contributions from new data partnerships and a focus on improving customer retention and sales productivity.Definitive Healthcare Corp Corporate Events
Executive/Board ChangesStock BuybackFinancial Disclosures
Definitive Healthcare Announces CFO Departure and Stock Buyback
Neutral
Nov 7, 2024
Definitive Healthcare has announced key developments including the transition of its CFO, Richard Booth, who will depart in June 2025, and a $100 million stock repurchase program set to commence following a previous $20 million program. The company reported a third-quarter revenue of $62.7 million, exceeding its guidance, despite a net loss due to goodwill impairment. With an eye on future growth, the company is actively assessing market opportunities and strengthening its customer base, evident from recent strategic partnerships and customer acquisitions.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.