Hi there,
Personally, I am a big fan of WELL - full disclosure I am also long the company.
Well is the third-largest electronic medical records (EMR) provider in the country. It also owns and operates a series of clinics – primarily in BC. In total it services approximately 1,500 clinics and 8,000 practitioners nationwide.
Recently the company took a stake in leading telehealth provide Insig. The company then launched VirtualClinic+ telehealth service on Insig’s platform and has seen considerable uptake. WELL is a fast-growing company that has made several acquisitions over the past year which has significantly expanded its footprint.
What I like about its model, is that it owns and operates clinics which in turn adopt the company's technologies. Combined with the OSCAR EMR system, it is already heavily intertwined in Canada's health landscape.
It also recently graduated from the TSX Venture to the TSX Index, which instantly increased its attractiveness to investors.
WELL recently reported strong quarterly results in which revenue jumped to $10.2 million, up from $7.4 million in 2019 and topping estimates for $9.2 million.
On the flip side, net loss expanded to $2 million, up from $1.5 million in the first quarter of 2020. I am not worried. High growth companies, especially those prone to making acquisitions, will incur higher than expected costs. It often takes years for them to achieve consistent profitability. Not that I am comparing the two, but Shopify is not profitable and look at its performance.
The company's roll out of VirtualClinic+ is seeing exponential growth. It has on-boarded more than 800 practitioners, and is averaging more than 1,000 bookings a day. This has fueled a 918% spike in digital services revenue. Considering the company's reach - the company is likely to see continued exponential growth in this area. This is also a higher margin area, and will help accelerate their path to profitability.
It has posted 6 consecutive quarters of record revenue and it is likely the company will continue posting record revenue with each passing quarter.
Overall, I like what I have seen from the company thus far. It does however, remain a small cap and as such is prone to significant volatility. Given this, an investment in WELL is best left to those with a higher risk tolerance.
Mat