Investing in firms which are a part of quickly increasing addressable markets is a wonderful technique for producing market-beating returns over time. In 2025, Canadian traders with a long-term horizon ought to think about gaining publicity to firms that function within the synthetic intelligence (AI) phase, which is forecast to broaden from US$280 billion in 2024 to nearly US$2 trillion in 2030.
With a market cap of $382 million, Healwell AI (TSX:AIDX) is one such firm positioned to ship outsized positive aspects to shareholders within the upcoming decade.
HealWell AI develops AI-driven scientific determination assist techniques and healthcare analytics throughout a number of segments. It presents technology-enabled illness screening, digital well being data, healthcare information administration, and scientific analysis providers to pharmaceutical firms, healthcare suppliers, and hospitals.
Is that this prime AI inventory a very good purchase proper now?
Within the fourth quarter (This fall) of 2024, Healwell AI delivered file quarterly income, reporting gross sales of $15.2 million, a rise of virtually 700% 12 months over 12 months. Comparatively, gross margins stood at $7 million, up near 1,180% from the year-ago interval. Its gross margins improved from 28% to 48% during the last 12 months, pushed by a shift towards higher-margin AI and software program companies.
“It’s unbelievable to mirror on what a transformative 12 months it’s been for Healwell AI,” stated CEO Dr. Alexander Dobranowski on the earnings name. “Just a bit over a 12 months since our launch, we’ve made vital strides in constructing what’s now a number one healthcare software program and synthetic intelligence firm.”
Healwell just lately closed the acquisition of Orion Well being, which ought to add $25 million in quarterly income and considerably enhance revenue margins. Orion Well being gives information analytics and interoperability options to over 70 industrial stakeholders worldwide, impacting greater than 150 million affected person lives.
Healwell has seen substantial development in its AI enterprise, with its AI and Knowledge Science phase income leaping 3,646% 12 months over 12 months in This fall. It now has grasp service agreements with 30 life sciences companions, together with seven of the highest ten world pharmaceutical firms, up from 12 MSAs a 12 months in the past.
For 2025, Healwell expects its AI and Knowledge Science phase income to double, whereas its Healthcare Software program phase will strategy $100 million yearly with Orion Well being’s contribution. The Scientific Analysis and Affected person Providers phase is projected to develop by about 50%.
Healwell has bolstered its monetary place by latest fairness and debt financing. It accomplished a $25.5 million bought-deal fairness financing, $30 million convertible debt financing, and a $50 million credit score settlement with Scotiabank and RBC.
“The time is now to plant our flag as a pacesetter in healthcare AI, not simply in Canada but in addition from a world perspective,” Dobranowski stated, highlighting the corporate’s optimism for continued development by natural enlargement and strategic acquisitions.
What’s the goal worth for this TSX inventory?
Analysts monitoring Healwell AI count on gross sales to extend from $39 million in 2024 to $270 million in 2028. Its free money move is forecast to develop to $28 million in 2028, up from an outflow of $26.3 million in 2024.
If the TSX inventory is priced at 20 occasions ahead FCF, it will likely be valued at a market cap of $560 million throughout the subsequent three years, indicating an upside potential of virtually 50% from present ranges. If it trades at 30 occasions ahead FCF, the upside potential will probably be nearer to 120%. Analysts stay bullish on the AI inventory and count on it to realize over 140% over the subsequent 12 months, given consensus worth targets.
