Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Equity Capital Markets

<ul>
<li>Waystar Holding, provider of mission-critical cloud software to healthcare organizations, set terms for an IPO and plans to raise ~$970M in the upcoming Nasdaq offering.</li>
<li>The initial public offering is expected to be between $20.00 and $23.00. At the midpoint, Waystar Holding has a market value of ~$3.7B based on 173.4M fully diluted shares.</li>
<li>In my insight, I discuss valuation framework for comparable company analysis and research multiples of M&amp;A transactions, including Athenahealth, Cerner and Change Healthcare. </li>
</ul>


Waystar Holding, provider of mission-critical cloud software to healthcare organizations, set terms for an IPO and plans to raise ~$970M in the upcoming Nasdaq offering.
The initial public offering is expected to be between $20.00 and $23.00. At the midpoint, Waystar Holding has a market value of ~$3.7B based on 173.4M fully diluted shares.
In my insight, I discuss valuation framework for comparable company analysis and research multiples of M&amp;A transactions, including Athenahealth, Cerner and Change Healthcare. 


Waystar Holding: IPO Price (Midpoint): $21.50. PT: $17.50, ~19% Downside. Move To Sidelines

<ul>
<li>Waystar Holding will be valued like other unprofitable healthcare IT unicorns on a multiple of forward revenue. I used EV/Revenue valuation methodology and FY23 EV/Revenue multiples to value the Waystar. </li>
<li>In 2019, CPPIB and EQT acquired a majority stake in Waystar, valuing the company at $2.7B, which implies an EV/FY23E revenue multiple of ~ 6x, including a debt of ~$2.3B. </li>
<li>My ~$3.6B IPO valuation contemplates a ~5x EV/Revenue on my FY23E revenue of $795M and is supported by my analysis of healthcare IT comps. </li>
</ul>


Waystar Holding will be valued like other unprofitable healthcare IT unicorns on a multiple of forward revenue. I used EV/Revenue valuation methodology and FY23 EV/Revenue multiples to value the Waystar. 
In 2019, CPPIB and EQT acquired a majority stake in Waystar, valuing the company at $2.7B, which implies an EV/FY23E revenue multiple of ~ 6x, including a debt of ~$2.3B. 
My ~$3.6B IPO valuation contemplates a ~5x EV/Revenue on my FY23E revenue of $795M and is supported by my analysis of healthcare IT comps. 


Waystar IPO Valuation Analysis: Lack of Bullish Catalysts and Weak Post-Listing Performance

<ul>
<li>Waystar Holding, a cloud-based technology company and healthcare RCM solution provider, filed for a $100M placeholder IPO.</li>
<li>Founded in 2017 through the merger of two healthcare firms, ZirMed and Navicure, Waystar Holding provides mission-critical cloud software to healthcare organizations in the United States. </li>
<li>The company has ~$2.3B of outstanding borrowings and plans to use net proceeds from an upcoming IPO to repay outstanding indebtedness under credit facilities. </li>
</ul>


Waystar Holding, a cloud-based technology company and healthcare RCM solution provider, filed for a $100M placeholder IPO.
Founded in 2017 through the merger of two healthcare firms, ZirMed and Navicure, Waystar Holding provides mission-critical cloud software to healthcare organizations in the United States. 
The company has ~$2.3B of outstanding borrowings and plans to use net proceeds from an upcoming IPO to repay outstanding indebtedness under credit facilities. 


Waystar IPO Preview: Debt-Fueled Expansion Through M&A Deals In A High-Interest Rate Environment

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Waystar Holding (WAY US)

Waystar Holding: IPO Price (Midpoint): $21.50. PT: $17.50, ~19% Downside. Move To Sidelines

I remain cautious about buying into upcoming Waystar Holding IPO and I would consider becoming more constructive on the stock if its valuation...

Andrei Zakharov

Waystar IPO Valuation Analysis: Lack of Bullish Catalysts and Weak Post-Listing Performance

In my insight, I will focus on the IPO valuation of Waystar Holding, a healthcare IT unicorn and provider of mission-critical cloud software to...

Andrei Zakharov

Waystar IPO Preview: Debt-Fueled Expansion Through M&A Deals In A High-Interest Rate Environment

Waystar Holding IPO looks risky in a high-interest rate environment, given the company’s debt-fueled expansion through a series of M&A deals.

Andrei Zakharov

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52-week Range

Market Cap (USDm)

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Waystar Holding: IPO Price (Midpoint): $21.50. PT: $17.50, ~19% Downside. Move To Sidelines

​I remain cautious about buying into upcoming Waystar Holding IPO and I would consider becoming more constructive on the stock if its valuation...

Andrei Zakharov

Waystar IPO Valuation Analysis: Lack of Bullish Catalysts and Weak Post-Listing Performance

In my insight, I will focus on the IPO valuation of Waystar Holding, a healthcare IT unicorn and provider of mission-critical cloud software to...

Andrei Zakharov

Waystar IPO Preview: Debt-Fueled Expansion Through M&A Deals In A High-Interest Rate Environment

Waystar Holding IPO looks risky in a high-interest rate environment, given the company’s debt-fueled expansion through a series of M&A deals.

Andrei Zakharov

I remain cautious about buying into upcoming Waystar Holding IPO and I would consider becoming more constructive on the stock if its valuation...