Health Catalyst, Inc. (HCAT) | Investment Case

1. Company Snapshot

1.a. Company Description

Health Catalyst, Inc.provides data and analytics technology and services to healthcare organizations.Its offerings include data and analytics platform, a commercial-grade data and analytics platform for the healthcare sector; AI and data science, providing integration of AI into existing business intelligence tools, increasing analytics accuracy; population health management identifies improvement across the care continuum as well as actionable guidance for success and automated workflows; financial transformation providing costing and labor productivity insights and revenue capture; quality and safety improvement using clinical quality and patient safety data, analytics, and expert services; and national data ecosystem for thought leadership and mutual knowledge exchange to transform care delivery through next-gen insights.

The company was formerly known as HQC Holdings, Inc.and changed its name to Health Catalyst, Inc.in March 2017.

Health Catalyst, Inc.was founded in 2008 and is based in South Jordan, Utah.

Show Full description

1.b. Last Insights on HCAT

Negative drivers behind Health Catalyst's recent performance include a Q4 earnings and revenue miss, with quarterly earnings of $0.04 per share, missing the Zacks Consensus Estimate of $0.11 per share. The company's revenue also fell short of estimates, with a 10% year-over-year decline in revenue. Additionally, Health Catalyst's stock price has continued to decline despite the company's efforts to improve its outlook, with a 50% drop in its stock price over the past few months. The company's focus on exiting lower-margin segments and pushing AI-driven efficiencies has not yet translated to improved profitability, with the company forecasting strong growth but struggling to deliver in the short term.

1.c. Company Highlights

Last Price	2.6
Change Percentage	-3.35%
Open	2.69
Previous Close	2.69
Market Cap ( Millions)	184
Volume	424791
Year High	8.74
Year Low	2.02
M A 50	2.84
M A 200	3.59

FCF Yield	-8.55%
Dividend Yield	0.00%
ROE	-27.72%
Debt / Equity	49.72%
Net Debt / EBIDTA	-343.55%
Price To Book	0.52
Price Earnings Ratio	-1.81
Price To FCF	-11.7
Price To sales	0.58
EV / EBITDA	-8.61

2. Health Catalyst's Q3 2025 Earnings: A Mixed Bag

Health Catalyst reported total revenue of $76.3 million and adjusted EBITDA of $12 million for Q3 2025, exceeding guidance on each metric. The Technology segment grew 7% year-over-year, with an adjusted gross margin of 53%. The company's actual EPS came out at $0.06, beating estimates of $0.05. Revenue growth was driven by the Apps layer and new client additions, which offset the headwinds from the transition from DOS to Ignite, a lower-priced platform. As Dan Burton noted, "We're through the change as it relates to exiting ambulatory operations pilot TEMS contracts that occurred as of June 30."

Publication Date: Nov -12

                                    📋 Highlights
                                    Q3 2025 Financial Performance::
                                                Total revenue reached $76.3 million, with adjusted EBITDA of $12 million, exceeding guidance on both metrics.
Technology Segment Growth::
                                                7% year-over-year revenue growth in the Technology segment, supported by a 53% adjusted gross margin.
Ignite Migration Progress::
                                                Approximately two-thirds of DOS clients expected to migrate to Ignite by end-2025, with flexibility offered for clients preferring DOS in the near-term.
2026 Outlook Adjustments::
                                                Anticipated revenue performance to decline by a few points in 2026 compared to 2025, citing lower net new clients and migration headwinds, but maintaining $310 million total revenue guidance for 2025.
Strategic Partnerships & Investments::
                                                Strengthened collaboration with Databricks and Microsoft to expand market reach, alongside targeted investments in cost management and ambulatory intelligence solutions.

                                

Financial Performance

The company's financial performance was a mixed bag, with revenue growth being driven by the Technology segment, while the transition to Ignite weighed on revenue. Adjusted EBITDA margin was 15.7%, indicating a relatively healthy profitability profile. The company's P/S Ratio of 0.6 suggests that the market is pricing in modest growth expectations. With an EV/EBITDA ratio of -8.76, the market is expecting significant improvement in EBITDA growth.

Operational Update

The company is making progress on its Ignite migration initiatives, with approximately two-thirds of DOS clients expected to migrate by the end of 2025. However, some clients may prefer to remain on DOS for the near and medium term, and the company has adjusted its approach to be more client-centric. Ben Albert mentioned that the company is emphasizing unique capabilities around cost management and ambulatory performance solutions, with proven ROI in those areas.

Outlook

The company expects revenue performance to be a few points lower in 2026 relative to 2025, driven by factors such as dollar-based retention rate in the low 90s, a lower net new client count, and Ignite migration headwinds. Analysts estimate next year's revenue growth at -1.2%. The company's guidance for Q4 and fiscal year 2025 suggests a continued focus on improving profitability, with adjusted EBITDA expected to grow.

Valuation

The company's valuation metrics suggest a relatively low expectation for growth. The P/E Ratio is -1.87, and the P/B Ratio is 0.54, indicating that the market is pricing in significant challenges for the company. However, the company's focus on client-centric innovation and measurable improvement may help drive growth in the long term.

3. NewsRoom

Matt Arens, CEO and Founder of Health Catalyst's Largest Shareholder, First Light Asset Management, Joins Board of Directors

Dec -02

Source: prnewswire.com

Health Catalyst to Participate in Upcoming Investor Conferences

Nov -14

Source: globenewswire.com

Acadian Asset Management LLC Has $4.39 Million Stake in Health Catalyst, Inc. $HCAT

Nov -14

Source: defenseworld.net

Health Catalyst, Inc. (HCAT) Q3 2025 Earnings Call Transcript

Nov -11

Source: seekingalpha.com

Health Catalyst (HCAT) Q3 Earnings and Revenues Top Estimates

Nov -11

Source: zacks.com

Health Catalyst (HCAT) Q3 Earnings: Taking a Look at Key Metrics Versus Estimates

Nov -11

Source: zacks.com

UnityPoint Health to Unlock Next Phase of Analytics Innovation by Activating Health Catalyst Ignite™

Nov -10

Source: prnewswire.com

Health Catalyst Achieves HITRUST r2 Certification, Demonstrating the Highest Level of Information Protection Assurance

Nov -10

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.46%)

6. Segments

Technology

Expected Growth: 8%

Health Catalyst's 8% growth is driven by increasing demand for data-driven healthcare solutions, expansion into new markets, and strategic partnerships. The company's technology platform provides actionable insights, improving patient outcomes and reducing costs. Growing adoption of value-based care, electronic health records, and analytics further fuels growth. Strong sales execution and a scalable business model also contribute to the company's rapid expansion.

Professional Services

Expected Growth: 12%

Health Catalyst's Professional Services segment growth is driven by increasing demand for data-driven healthcare solutions, expansion of existing client relationships, and strategic partnerships. The company's expertise in healthcare analytics and outcomes improvement, combined with its scalable technology platform, enables it to capitalize on the growing need for healthcare providers to optimize operations and improve patient outcomes.

7. Detailed Products

Data Operating System (DOS)

A cloud-based data platform that enables healthcare organizations to integrate, organize, and analyze their data to improve patient care and reduce costs.

Touchstone

A cloud-based analytics platform that provides real-time insights and benchmarking capabilities to healthcare organizations.

DOS Marts

Pre-built, cloud-based data marts that provide rapid access to curated, analytics-ready data for specific healthcare domains.

Healthcare Analytics Platform

A comprehensive analytics platform that enables healthcare organizations to integrate, analyze, and visualize their data to drive insights and improvement.

Patient Safety Monitor

A real-time patient safety surveillance system that identifies potential safety events and alerts clinicians to take proactive measures.

Quality Improvement

A comprehensive quality improvement platform that enables healthcare organizations to measure, analyze, and improve clinical quality and patient safety.

8. Health Catalyst, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Health Catalyst, Inc. has a moderate threat of substitutes due to the presence of alternative healthcare analytics solutions. However, the company's strong brand reputation and customer loyalty mitigate this threat to some extent.

Bargaining Power Of Customers

Health Catalyst, Inc. has a low bargaining power of customers due to the fragmented nature of the healthcare industry, which reduces the negotiating power of individual customers.

Bargaining Power Of Suppliers

Health Catalyst, Inc. has a moderate bargaining power of suppliers due to the presence of multiple suppliers of healthcare data and analytics services. However, the company's strong relationships with suppliers mitigate this threat to some extent.

Threat Of New Entrants

Health Catalyst, Inc. has a high threat of new entrants due to the growing demand for healthcare analytics and the relatively low barriers to entry in the industry.

Intensity Of Rivalry

Health Catalyst, Inc. operates in a highly competitive industry with several established players, leading to a high intensity of rivalry among competitors.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	38.67%
Debt Cost	3.95%
Equity Weight	61.33%
Equity Cost	10.54%
WACC	7.99%
Leverage	63.06%

11. Quality Control: Health Catalyst, Inc. passed 4 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Accolade

A-Score: 4.6/10

Value: 8.0

Growth: 5.8

Quality: 3.8

Yield: 0.0

Momentum: 9.5

Volatility: 0.7

1-Year Total Return ->

OptimizeRx

A-Score: 4.3/10

Value: 3.5

Growth: 6.0

Quality: 5.2

Yield: 0.0

Momentum: 10.0

Volatility: 1.0

1-Year Total Return ->

Phreesia

A-Score: 4.0/10

Value: 3.3

Growth: 5.9

Quality: 5.0

Yield: 0.0

Momentum: 6.0

Volatility: 3.7

1-Year Total Return ->

Health Catalyst

A-Score: 3.6/10

Value: 9.2

Growth: 5.6

Quality: 4.3

Yield: 0.0

Momentum: 0.5

Volatility: 2.0

1-Year Total Return ->

Schrödinger

A-Score: 3.4/10

Value: 4.6

Growth: 2.8

Quality: 3.9

Yield: 0.0

Momentum: 7.0

Volatility: 2.3

1-Year Total Return ->

Augmedix

A-Score: 3.2/10

Value: 6.4

Growth: 4.6

Quality: 3.5

Yield: 0.0

Momentum: 5.0

Volatility: 0.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

28.73%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

7.99%

Health Catalyst, Inc. - US42225T1079

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on HCAT

1.c. Company Highlights

Weak Momentum

Fairly Valued

Average Growth

Earnings Beats

Average Quality

Revenues Beats

Medium Volatility

Stable Momentum

Earnings Miss

Revenues Miss

Cheaper

Lower Quality

2. Health Catalyst's Q3 2025 Earnings: A Mixed Bag

Financial Performance

Operational Update

Outlook

Valuation

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.46%)

6. Segments

Technology

Expected Growth: 8%

Professional Services

Expected Growth: 12%

7. Detailed Products

Data Operating System (DOS)

Touchstone

DOS Marts

Healthcare Analytics Platform

Patient Safety Monitor

Quality Improvement

8. Health Catalyst, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Health Catalyst, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

2.6$

Current Price

2.6$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA