Reliq Health Technologies Inc. (RHT:TSX.V; RQHTF:OTCQB; A2AJTB:WKN) continues to pick up more contracts with skilled nursing facilities (SNFs) and other health care groups, and now it also has gotten analyst attention.
The telehealth company announced new contracts with 20 SNFs, ten physician practices, and two home care agencies in California, Florida, Nevada, and Texas.
The contracts are expected to add over 30,000 new patients to the company's iUGO platform by the end of the month at a revenue of CA$65 per patient per month.
"As our shareholders know, the Skilled Nursing Facility (SNF) market has been a source of rapid growth for Reliq," said Chief Executive Officer Lisa Crossley. "SNFs are excellent partners for Reliq as they provide training on the iUGO Care system to their patients prior to discharge, which helps ensure high adherence levels for this patient population."
In a June 20 research note, Maxim Group analyst Allen Klee initiated coverage on Reliq with a Buy rating and a CA$1.75 per share price target.
In a June 20 research note, Maxim Group analyst Allen Klee initiated coverage on Reliq with a Buy rating and a CA$1.75 per share price target.
"We believe a discount to the peer group average is warranted based on the company being at an early stage of execution," Klee wrote. "Our positive outlook includes a large market opportunity with compelling economics. We also take into account . . . Reliq’s large number of wins among larger customers, which is a leading indicator for future growth."
Klee noted that the company has been signing larger contracts in 2022 and 2023. Reliq also recently signed a contract with a U.S. health plan that operates in five states with more than 3,000 doctors and 1 million patients, a move expected to add more than 10,000 new patients to iUGO by next March.
"We project that Reliq will have a primarily recurring, high-margin business model going forward," Klee wrote.
The Catalyst: Chronic Illness Driving Market Growth
The global telehealth market is expected to reach US$455.3 billion by 2030 with a compound annual growth rate (CAGR) of 24% from 2023 to 2030, according to Research and Markets.
"The pandemic exposed the shortcomings in the health care systems," the researchers wrote. "The government-imposed travel restrictions and lockdowns (mandated) in order to curb the spread of the virus . . . led to patients and healthcare institutions shifting towards teleconsultation and telemedicine."
The global telehealth market is expected to reach US$455.3 billion by 2030 with a compound annual growth rate (CAGR) of 24% from 2023 to 2030, according to Research and Markets.
The rising occurrence of chronic illness in developing regions also is driving the demand for telemedicine services, Global Market Insights wrote.
"Increased traditional health care costs, growing number of digital health users, and the evolution of health services in the health care institutions have spurred the technology uptake," researchers wrote.
Klee noted that chronic disease accounts for more than 80% of healthcare spending.
"Over 57 (million) Medicare/Medicaid patients have eligible chronic conditions, resulting in a multi-billion-dollar TAM (total addressable market," he wrote. "Practitioners benefit from new revenue streams (over $400 per patient per month), and the ability to oversee more patients."
Analyst Predicts More Expansion
Reliq earlier this month announced record revenues for the three months ending March 31 and its first profitable quarter with a gain from operations of CA$731,017.
During the same three months in 2022, the telehealth company reported a loss of CA$811,042. Sales increased 88% YoY to CA$4.7 million compared to CA$2.4 million for the three months ending March 31, 2022.
The analyst also sees potential catalysts for the coming year, predicting "increased cash flow generation, shift to profitability, an uplisting to a large U.S. exchange, and the initiation of a stock dividend."
The company said gross profits for the quarter increased by 95% to CA$3.2 million. Gross margins for the period were 68% and are expected to exceed 70% by the end of 2023 due to reduced device costs and an increase in the percentage of Reliq's total revenues from higher-margin software and services vs. hardware sales.
The company said its adjusted EBITDA for Q3 FY 2023 was a 2,190% increase YoY to CA$1.4 million.
Klee projected "onboarded lives of 21K by the end of FY23, to 54K by FY24 and 137K by FY25 (primarily all in the U.S.), which translates to FY23-FY25 revenue of CA$17M, CA$27M and CA$95M, up 101%, 99% and 184%, respectively."
"Note that we are the only sell-side firm covering the stock," he added.
The analyst also sees potential catalysts for the coming year, predicting "increased cash flow generation, shift to profitability, an uplisting to a large U.S. exchange, and the initiation of a stock dividend."
Managing Diseases From Home
Reliq's platform aims to manage diseases such as chronic obstructive pulmonary disease (COPD), congestive heart failure, diabetes, hypertension, and others.
In an April 3 note, Sadif Analytics upgraded RHT to Above Average from Average. The company "has fair financials and good earnings quality," the note said, adding the stock was "safe."
Patients get audible reminders to step on a scale, take their blood pressure, or prick their fingers for glucose monitoring. The information is automatically uploaded to the cloud.
iUGO draws on data from fall detection devices, medication tracking, and vitals data to flag patients at home or in facilities who need additional monitoring.
In an April 3 note, Sadif Analytics upgraded RHT to Above Average from Average. The company "has fair financials and good earnings quality," the note said, adding the stock was "safe."
Streetwise Ownership Overview*
Reliq Health Technologies Inc. (RHT:TSX.V; RQHTF:OTCQB; A2AJTB:WKN)
Technical analyst Clive Maund of CliveMaund.com recommended the stock shortly after news broke last year that the company's revenue jumped 485% from the fiscal year 2021 to the fiscal year 2022. Writing for Streetwise Reports, he said he would "stay long" on the stock.
Ownership and Share Structure
About 8% of Reliq's shares are owned by insiders, including Crossley, with 1.6% or 3.22 million shares. About 0.3% of the company is owned by institutional investors, including FNB Wealth Management, with 0.01% or 0.03 million shares, according to Reuters.
Other top investors include Eugene Beukman, who owns 0.11% or 0.23 million shares, and Brian Storseth, who owns 0.07% or 0.14 million shares, Reuters said.
Crossley said 91.7% of the company is retail.
The company has 203 million shares outstanding, with about 199 million free-floating. It has a market cap of CA$97.39 million and trades in a 52-week range of CA$0.76 and CA$0.36.
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