Definitive Healthcare Corp. (NASDAQ: DH)

Sector: Healthcare Industry: Health Information Services CIK: 0001861795
Market Cap 277.42 Mn
P/B 0.97
P/E -1.47
P/S 1.15
ROIC (Qtr) -65.42
Div Yield % 0.00
Rev 1y % (Qtr) -4.23
Total Debt (Qtr) 175.40 Mn
Debt/Equity (Qtr) 0.62

About

Definitive Healthcare Corp. (DH), a prominent name in the healthcare industry, is dedicated to transforming data, analytics, and expertise into actionable healthcare commercial intelligence. The company's mission is to help clients navigate the complex healthcare landscape by providing them with the right insights to shape future industry trends. DH's primary business activities revolve around offering a software-as-a-service (SaaS) platform that provides comprehensive and accurate information on the United States healthcare ecosystem. The platform...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 108.32M provide 9.49x coverage of short-term debt 11.41M, demonstrating strong liquidity position and minimal refinancing risk.
  • Robust free cash flow of 36.01M exceeds capital expenditure of 23.18M by 1.55x, indicating strong organic growth funding capability.
  • Robust tangible asset base of 278.69M provides 3.01x coverage of working capital 92.44M, indicating strong operational backing.
  • R&D investment of 33.80M represents healthy 0.37x of deferred revenue 92.02M, indicating strong future innovation pipeline.
  • Operating cash flow of 59.19M provides strong 4.07x coverage of tax liabilities 14.55M, showing excellent fiscal position.

Bear case

  • Operating cash flow of 59.19M barely covers its investment activities of 71.25M, with a coverage ratio of 0.83, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 59.19M provides insufficient coverage of deferred revenue obligations of 92.02M, which is 0.64x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of 59.19M shows concerning coverage of stock compensation expenses of 28.35M, with a 2.09 ratio indicating potential earnings quality issues.
  • Operating earnings of (192.56M) show weak coverage of depreciation charges of 55.35M, with a -3.48 ratio indicating high capital intensity and potential reinvestment needs.
  • Operating cash flow of 59.19M provides minimal -3.75x coverage of tax expenses of (15.80M), suggesting potential tax planning inefficiencies or unsustainable tax positions.

Product and Service Breakdown of Revenue (2024)

Geographical Breakdown of Revenue (2024)

Peer comparison

Companies in the Health Information Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 TEM Tempus AI, Inc. 45.63 Bn -223.83 41.29 1.34 Bn
2 GEHC GE HealthCare Technologies Inc. 38.75 Bn 19.85 2.19 10.28 Bn
3 VEEV Veeva Systems Inc 37.30 Bn 43.36 12.11 0.09 Bn
4 DOCS Doximity, Inc. 7.81 Bn 30.87 12.57 0.01 Bn
5 BTSG BrightSpring Health Services, Inc. 7.70 Bn 59.42 0.62 2.70 Bn
6 HQY Healthequity, Inc. 7.32 Bn 38.14 5.67 1.03 Bn
7 WAY Waystar Holding Corp. 5.00 Bn 44.97 4.81 1.25 Bn
8 PRVA Privia Health Group, Inc. 2.79 Bn 153.67 1.37 0.01 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.50 2.77
EV to Cash from Ops. EV/CFO 6.33 -10.86
EV to Debt EV to Debt 2.13 161.93
EV to EBIT EV/EBIT -1.94 -106.48
EV to EBITDA EV/EBITDA -1.55 4.22
EV to Free Cash Flow [EV/FCF] EV/FCF 10.40 7.46
EV to Market Cap EV to Market Cap 1.35 -14.93
EV to Revenue EV/Rev 1.55 1.76
Price to Book Value [P/B] P/B 0.97 10.57
Price to Earnings [P/E] P/E -1.47 147.14
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 -8.65
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 5.00
Dividend per Basic Share Div per Share (Qtr) 0.00 0.04
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 4.57
Interest Coverage Int. cover (Qtr) -16.14 -584.72
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -1,038.00 -24.09
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -21.29 172.48
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -1.05
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 49.29 -17.73
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 57.55 39.85
EBIT Growth (1y) % EBIT 1y % (Qtr) 49.89 -38.83
EBT Growth (1y) % EBT 1y % (Qtr) 48.81 -4.52
EPS Growth (1y) % EPS 1y % (Qtr) 45.45 2.60
FCF Growth (1y) % FCF 1y % (Qtr) -31.71 -48.57
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -9.50 5.49
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.32 0.66
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.03
Cash Ratio Cash Ratio (Qtr) 0.70 1.87
Current Ratio Curr Ratio (Qtr) 1.60 3.27
Debt to Equity Ratio Debt/Equity (Qtr) 0.62 -0.43
Interest Cover Ratio Int Coverage (Qtr) -16.14 -584.72
Times Interest Earned Times Interest Earned (Qtr) -16.14 -584.72
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -56.60 -435.80
EBIT Margin % EBIT Margin % (Qtr) -79.48 -464.70
EBT Margin % EBT Margin % (Qtr) -84.41 -461.74
Gross Margin % Gross Margin % (Qtr) 75.90 44.03
Net Profit Margin % Net Margin % (Qtr) -77.90 -468.01