CloudMD Software and Services Inc. (DOCRF)

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Canadian digital health stock with Buy rating.

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October 14, 2021

It’s a space that’s expected to see accelerated growth for years to come as physicians, clinics, hospitals and health units join the digital transformation that has already overtaken a number of sectors. For healthcare, the development means using information technology-based solutions and services to better facilitate all facets from team communication and data analytics to the use of artificial intelligence to improve diagnostics and procedures. And Canadian companies are playing a role in the revolution on a number of levels, leaving investors with lots of options in digital healthcare.

CloudMD Software & Services (TSXV:DOC) is the owner of onsite clinics and telemedicine services as well as an IT solutions platform for clinical practitioners.

Total revenues as per its latest quarter were $15.7 million with adjusted EBITDA just below the line at negative $0.7 million and after a number of acquisitions over the past year the company’s annualized revenue run rate is now over $140 million.

Research Capital Corporation analyst Yue Ma has given CloudMD a “Buy” rating, maintaining the rating and target price of $3.30 per share in a late August update to clients.
https://www.cantechletter.com/2021/08/cloudmd-is-undervalued-says-research-capital/#
Ma said with its three verticals established in clinic services and pharmacies, digital services and enterprise health solutions, CloudMD has solid growth prospects.

“DOC closed multiple acquisitions during 2020 and H1 2021, establishing an ecosystem of various product offerings and a large client base, creating significant cross-selling opportunities. DOC continues integrating those newly acquired businesses – based on which the company has launched a Complete Health Platform that targets approx. 260K employees covered by existing sales contracts in digital services and EHS,” Ma wrote.

“During the pilot phase, 11K employees have been onboarded to the platform and achieved a retention rate of 48 per cent and a satisfaction score of 73 per cent – above DOC’s expectations. We believe the initial success of the Complete Health Platform should attest to the feasibility of DOC’s organic growth strategy – boding well for future growth,” Ma said.

CloudMD’s share price is down about 40 per cent for the year so far, but Ma is expecting upside to the name, with his $3.30 target representing at the time of publication a projected one-year return of 76 per cent.