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What happened
Shares of Health Catalyst (NASDAQ: HCAT), jumped 23.34% on Wednesday. The stock closed on Tuesday at $6.47, then opened on Wednesday at $8.54. It ran as high as $8.59 before closing at $7.98. So far this year, the stock is still down more than 79%. It has a 52-week low of $6.40 and a 52-week high of $51.20.
So what
The company, which provides data and analytic solutions to healthcare companies, released its third-quarter earnings after the market closed on Tuesday. The company reported revenue of $68.4 million, up 11%, year over year, led by a 15% jump in revenue from its technology segment. It also had a net loss of $45.7 million, which was 14% more than its losses in the same period last year.
The revenue number and the net loss were both positive surprises compared to what analysts had predicted for the company. The real driving force for Health Catalyst’s jump in share price was its optimistic fourth-quarter guidance and 2022 full-year guidance. The company raised full-year revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) estimates for both time frames.
It said it now expected revenue between $66.9 million and $68.9 million in the next quarter, along with adjusted EBITDA between a loss of $2.1 million and a loss of $100,000. For the full year, its expectations were for revenue between $274 million and $276 million, and adjusted EBITDA between a loss of $4 million and a loss of $2 million. That represents a strong improvement from the $241.9 million in revenue last year and adjusted EBITDA loss of $11.2 million in 2021.
Now what
Health Catalyst has increased revenue every year since the healthcare technology stock’s initial public offering in 2019, but it still loses money. Investors, seeing consistent revenue growth, seem willing to overlook the losses as the company is expected to grow out of them.
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Jim Halley has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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