Phreesia (PHR): Reassessing Valuation After First Quarterly Profit, Record Margins and Upgraded Outlook
Phreesia (PHR) just delivered the kind of quarter investors had been waiting for, swinging to a profit on double digit revenue growth and record margins, while also tightening and raising its forward outlook.
See our latest analysis for Phreesia.
Yet despite the earnings beat, tighter guidance and AccessOne acquisition, sentiment has reset sharply, with a roughly 32% 1 month share price return and a 5 year total shareholder return of about negative 72%. This suggests long term holders are still waiting for convincing, durable momentum.
If this kind of rebound story has your attention, it might be a good moment to compare Phreesia with other healthcare names using our healthcare stocks.
With shares still down sharply over one and five years, yet trading at a steep discount to analyst targets despite a new path to profitability, is Phreesia now mispriced value, or are investors correctly assuming that future growth is already baked in?
Most Popular Narrative: 52% Undervalued
With Phreesia last closing at $15.43 against a narrative fair value of about $32.12, the valuation case leans heavily on sustained growth and margin expansion.
The continued rollout and adoption of new value added modules such as appointment readiness, enhanced bill pay, and post script engagement are increasing recurring revenue per client and expanding Phreesia's addressable market, which supports both top line growth and enhanced net margins over time. Ongoing integration of AI across products and internal operations is expected to drive future efficiencies, enable new product capabilities, and strengthen Phreesia's competitive differentiation, thereby supporting operating leverage and potential EBITDA margin expansion.
Want to see what kind of revenue runway and margin profile could justify this gap, and the profit multiple it quietly bakes in? The full narrative explains the growth curve, the profitability inflection, and the assumed re rating path that underpin this fair value.
Result: Fair Value of $32.12 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, sustained execution is not guaranteed, as tougher competition and potential regulatory changes are both capable of undermining cross selling momentum and margin expansion.
Find out about the key risks to this Phreesia narrative.
Build Your Own Phreesia Narrative
If you want to dig into the numbers yourself and challenge this view, you can build a custom narrative in under three minutes, Do it your way.
A great starting point for your Phreesia research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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