Definitive Healthcare Corp (DH) PT Lowered to $3.50 at Goldman Sachs

Goldman Sachs analyst Kash Rangan lowered the price target on Definitive Healthcare Corp (NASDAQ: DH) to $3.50 (from $3.80) while maintaining a Neutral rating.

The analyst comments "We reiterate our Neutral rating and lower our PT to $3.50 ($3.80 previously) following DH's F3Q25 results. The stock is indicated +8% AH as the company delivered improving renewal trends, stable customer counts, and the first QoQ net addition of Enterprise customers since F1Q24. Total revenue of $60mn declined -4% YoY (+1% vs. Consensus), as the company continued to benefit from operational improvements. Profitability metrics significantly exceeded expectations with OpM of 27% (+520bps vs. Consensus), reflecting continued expense discipline. On the operational front, DH demonstrated encouraging momentum with total customer count holding steady at approximately 2,400 while adding a net 10 Enterprise (ARR>$100K) customers to reach 520, marking the highest level since F3Q24. Management highlighted renewal rate improvements in both F2Q25 and F3Q25, with renewal rates showing year-over-year improvement across key end markets including Diversified and Life Sciences, which together represent nearly 90% of ARR. Additionally, cRPO growth accelerated to +1% YoY (vs. 0% in F2Q25), though management noted that excluding the data partnership contribution, cRPO would decline mid-single digits. Looking ahead, management expects Net Dollar Retention to face continued YoY pressure due to ongoing upsell challenges in Life Sciences, while Gross Dollar Retention is anticipated to improve as operational initiatives gain traction. Despite strong profitability execution, encouraging customer acquisition trends, and improving renewal rates, the persistent headwinds in retention metrics and gradual pace of topline recovery limit our conviction, prompting us to remain on the sidelines."

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