"The healthcare SaaS provider posted net income of $4.3 million for the quarter ending October 31, marking its first meaningful profit after years of losses. Revenue climbed to $120.3 million, continuing a five-quarter acceleration from $106.8 million a year ago. More importantly, operating cash flow reached $15.5 million, exceeding net income by $11.2 million and validating earnings quality. Free cash flow turned positive at $12.2 million after subtracting $3.3 million in capital expenditures."
"The market's tepid response likely reflects forward valuation concerns. Despite unanimous analyst support (17 buy ratings, zero sells, with a $33.69 average price target), Phreesia trades at a forward P/E of 385. That extreme multiple suggests investors remain skeptical about earnings sustainability, even as the company has now beaten estimates for four consecutive quarters. The operating margin tells part of the story. While net income turned positive, operating income remained negative at $23.9 million, indicating the company still relies on non-operating items to reach profitability."
Phreesia reported EPS of $0.31 and net income of $4.3 million for the quarter ending October 31, its first meaningful profit after years of losses. Revenue rose to $120.3 million, continuing a five-quarter acceleration from $106.8 million a year earlier. Operating cash flow reached $15.5 million, exceeding net income by $11.2 million. Free cash flow was $12.2 million after $3.3 million in capital expenditures. The company cut operating expenses by $15 million year over year while maintaining sequential revenue growth. Operating income remained negative $23.9 million and trailing operating margin was -46.7%. Phreesia trades at a forward P/E of 385 despite 17 buy ratings and a $33.69 average price target. Three directors purchased shares on October 31.
Read at 24/7 Wall St.
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