Waystar rises as IPO banks bullish after research quiet period ends

Waystar Holding

02/07/2024 13:27

** Shares of private equity-backed healthcare payments
provider Waystar  WAY.O  up >1% premarket after a wave of
bullish reports from analysts at investment banks which
underwrote its June IPO
    ** WAY shares on Mon closed at $21.51, a penny above
the$21.50 IPO price
    ** JP Morgan, one of IPO's lead bookrunners, initiates
coverage at "buy" with $24 PT
    ** Waystar has significant room to grow in $15 bln
addressable market growing 5% annually, as solutions adoption
driven by growing number and complexity of healthcare payments
and greater utilization of advanced RCM (revenue cycle
management) technologies such as AI, JP Morgan says in note
    ** Evercore starts with "outperform" and $25 PT, citing co's
strong portfolio of subscription and volume-based solutions,
"unparalleled" customer service, while delivering "softwarelike"
margins and HSD+ growth with minimal churn
    ** RBC slaps "outperform" rating on WAY with $27 PT, and
points to post-IPO leverage of ~3.8x, saying co expects to work
leverage down to 2x or below over time via its "significant"
recurring revenue and high cash conversion
    ** Other bullish ratings include: Raymond James
("outperform", $30 PT); Deutsche Bank ("buy", $27 PT); William
Blair ("outperform")
    ** Swedish PE firm EQT  EQTAB.ST  has 29.2% stake in
Waystar, while Canada Pension Plan Investment Board and Bain
Capital own stakes of 22.3% and 16.8%, respectively

 (Lance Tupper is a Reuters market analyst. The views expressed
are his own)
 ((lance.tupper@thomsonreuters.com
lance.tupper@tr.com 1-646-279-6380))