Why Phreesia Stock Got Knocked Down Today
Key Points
This added to lingering negative sentiment following the company's latest earnings release.
Investors didn't like the fact that it whiffed on earnings.
- 10 stocks we like better than Phreesia ›
Hardly for the first time in recent trading sessions, Phreesia (NYSE: PHR) stock took it on the chin Tuesday. Investors remained bearish on the stock following the healthcare provider software specialist's second-quarter earnings release last week. This was exacerbated by an analyst's recommendation downgrade early Tuesday morning.
Buffeted by these headwinds, the company's stock closed that trading session almost 7% lower.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
It's now a hold, says pundit
The downgrading party was financial services company Raymond James, in the person of pundit John Ransom. He moved his Phreesia rating down one peg to market perform (hold, in other words) from his previous outperform (buy).
Image source: Getty Images.
The catalyst for this, unsurprisingly, was that quarterly performance. According to reports, Ransom expressed concern that the company's organic revenue growth continues to decline, potentially turning negative in the second half of this year.
The analyst also wrote in his update that Phreesia's spending on the build-out of its artificial intelligence (AI) capabilities could pressure the growth of earnings before interest, taxes, depreciation, and amortization (EBITDA). On top of that, the company's target market of healthcare providers and networks might see constrained budgets going forward.
A wait-and-see situation
Although Phreesia posted a quarter where it missed on the bottom line, its performance wasn't bad by any stretch of the imagination -- revenue grew by 10% year over year, while profitability nearly tripled. That said, it has several new products that will probably need time to win over customers, and it's in the midst of restructuring its operations.
It has potential as an investment, to be sure, but it's probably best to wait a bit to see if the restructuring improves its business and those newer offerings capture the hearts of customers.
Should you buy stock in Phreesia right now?
Before you buy stock in Phreesia, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Phreesia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $421,997!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,413,876!*
Now, it’s worth noting Stock Advisor’s total average return is 978% — a market-crushing outperformance compared to 213% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of September 8, 2026.
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.
Recommended Articles
