Stifel upgraded Tabula Rasa HealthCare (NASDAQ:TRHC) to “buy” from “hold” and raised its price target to $75 from $70, citing an “improving risk/reward with a favorable fundamental backdrop.” The stock closed at $57.64 on Aug. 29.
Tabula’s Medication Risk Mitigation Matrix technology delivers simultaneous, multi-drug reviews that identify medication-related risk across a variety of safety factors and presents actionable opportunities to mitigate risk and optimize patients’ medication regimens.
Analyst David Grossman writes that Tabula is now trading at 4.1 times estimated 2020 revenue (5.9 times service revenue), which is “more in line with comparable companies and a more attractive entry point, particularly given potential catalysts over the next 12-to-18 months.”
Mr. Grossman said there are four potential catalysts over the next 12-to-18 months that could either drive estimates higher or drive multiple expansion.
They include leveraging the company’s Enhanced Medication Therapy Management (EMTM) services to garner higher pricing and market share in the traditional Medicare MTM market; selling EMTM into the managed Medicaid market, a new market for Tabula; a more organized and expanded selling effort; and leveraging the recent PrescribeWellness acquisition, he added.
