Why Phreesia Stock Tumbled Today
Key Points
Although its net income rose sharply, analysts expected better.
On a brighter note, the company slightly topped the consensus pundit estimate for revenue.
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Next-generation healthcare tech stock Phressia (NYSE: PHR) was looking quite under the weather on Thursday. After it published its latest set of quarterly figures just after market close the day before, its equity was hit by a determined sell-off. It closed down more than 6% on Thursday.
Improved outcomes
Phreesia, which automates numerous processes underpinning the patient-doctor relationship, posted revenue of $129.5 million in its second quarter of fiscal 2027. That bettered the year-ago result by 10%, and was on the back of a 6% rise in the average number of healthcare services clients (AHSCs, a crucial metric for the company).
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Net income under generally accepted accounting principles (GAAP) zoomed much higher, rising almost threefold to $1.9 million, or $0.03 per share.
However, analysts tracking Phreesia stock were expecting an even higher bounce. Their consensus estimate for net profit was $0.09 per share. On the top line, the company edged past the average pundit projection of just under $129.1 million.
In the earnings release, the company said it was particularly enthusiastic about two recently introduced products, financing and payments solution AccessOne (purchased in a 2025 acquisition) and healthcare provider digital marketing platform ProviderConnect.
In-line guidance for the top line
Phreesia maintained its guidance throughout fiscal 2027. Management continues to believe that the company will earn $510 million to $520 million in revenue; the consensus analyst estimate is $515 million. The company is also modeling annual non-GAAP (adjusted) earnings before interest, taxes, depreciation, and amortization (EBITDA) of $125 million to $135 million.
Phreesia's second-quarter performance certainly wasn't bad, however it wasn't blow-me-away spectacular, either. Meanwhile, the company is going through a restructuring process that'll last throughout the fiscal year, and those two relatively new offerings will surely need time to catch fire with the market. Given all that, I'd hold off on investing in the stock for now.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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