Definitive Healthcare Corp (DH) PT Lowered to $7 at Deutsche Bank

May 8, 2024 1:29 PM EDT
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Price: $5.74 -4.33%

Rating Summary:
    3 Buy, 11 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 7 | Down: 10 | New: 37
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Deutsche Bank analyst George Hill lowered the price target on Definitive Healthcare Corp (NASDAQ: DH) to $7.00 (from $10.00) while maintaining a Hold rating.

The analyst comments "Definitive Healthcare reported Q1 results and trimmed 2024 guidance due to macro headwinds and disruptions from restructuring its sales org at the beginning of the year, which led to a sharp fall in DH shares. DH shares were down >30% this am after the market open. For FY24, DH expects revenue to grow 1% - 4% y/y to the range of $255mm - $261mm, down from 5% - 7% previously guided in Q4. Adjusted EBITDA guidance is reduced to $81.5mm - $84.5mm from $84.0mm - $88.0mm, implying EBITDA margin of 32.0% - 32.4% vs prior 31.9% - 32.7%. The slow starts to the year were mainly attributed to two factors, including macro headwinds that sales cycles remain elongated as new logo buyers scrutinize on spendings and significant disruption in sales efforts in the first few months of the year from restructuring disruptions. DH remains focusing on operational efficiencies and anticipates full year operating leverage in sales and marketing to improve by 300bps - 400bps y/y. As the company called out in Q4, DH continues to see improved customer retention from consistent efforts in improving delivery and services and now anticipates NDR expansion by 100bps - 200bps by the end of year which reverses the previous declining trend. Stock reacted negatively with shares down 31.0% today. "

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