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- RBC Capital Markets believe that the market has been assigning little-to-no value to Tabula Rasa HealthCare Inc's (NASDAQ:TRHC) MedWise, which has been burning cash and clouding, a strong core PACE business.
- The analyst lowered the price target to $6 from $8, with an Outperform rating.
- Offloading MedWise should provide enough liquidity to fund operations, which RBC expects to happen sooner than anticipated.
- The management sounded confident the transaction(s) would close within the next quarter or two, which is believed to lift a sizable overhang on the stock once complete.
- The analysts also said that the softer 2022 growth outlook for CareVention will likely keep some buyers on the sidelines in the near term.
- Proceeds should give the company some flexibility, but it will still need to prove it can generate cash. TRHC paid over $200 million for PrescribeWellness, SinfoniaRx, and DoseMe, contributing ~$80 million of revenue in 2021.
- Proceeds from the sale(s) should help the company pay down the $57 million balance on its revolver and fund operations for the balance of the year.
- Price Action: TRHC shares are down 8.29% at $3.76 during the market session on the last check Monday.