About the company

Waystar Holding was formed in 2017 through the merger of Navicure and ZirMed. It is a leading provider of software solutions for healthcare payments. Its mission is to streamline their workflow and take the burden off healthcare providers and ultimately their patients. Waystar serves a huge number of clients that include healthcare providers ranging from district outpatient clinics to hospitals and large healthcare organizations. Through its innovative technology, it can process billions of transactions and order volumes annually. In this way, it contributes in the efficiency and simplicity of these transactions and enables its clients to better manage their cash flow.

IPO of the Year

In its initial public offering, Waystar Holding, under the ticker WAY, sold 45 million shares of common stock at $21.50 per share, and its IPO raised a total of $967.5 million. While this amount is slightly lower than expected, it is still the largest IPO in the US this year. Despite the initial valuation of these shares, their fair trading value was initially at around USD 21 per share, but by Monday it had already reached 22.10 USD, with the company's market value approaching 3.7 billion USD.[1] Banks J.P. Morgan, Goldman Sachs and Barclays jointly acted as lead underwriters in the issue of these shares, which totalled 173.4 million. According to Waystar Holding CEO Matt Hawkins, the proceeds from the IPO will help reduce the company's debt and thus strengthen its capital structure.[2][3]

Waystar Holding's share price since its IPO (Source: Google Finance)*

Collaboration with Google Cloud

Artificial intelligence has potential almost everywhere, and this sector is no exception. In May, Waystar announced a collaboration with the Google Cloud platform to address issues such as administrative burdens and wasted funds, which are some of the most pressing in the US healthcare industry. The collaboration focuses on automating processes and improving efficiencies in Waystar's software platform using generative artificial intelligence. The goal is to improve the financial health of healthcare providers by ensuring accurate and timely payments. The collaboration is intended to simplify revenue management, optimize provider resources, and ultimately improve patient care in the healthcare industry.[1]

Financial results and future expectations

Despite Waystar's 2023 revenue growing 12.2% year-over-year to $791 million, it still recorded losses, with a net loss of $51.3 million in the prior year. For the first quarter of 2024, it recorded revenues of 224.80 million USD with a year-on-year increase of 17.64%, but the loss widened by almost 50% to 15.9 billion USD.[2] The company is still in debt, which stood at 2.27 billion USD for the first quarter of 2024.[3] Waystar expects to grow its medical payment services market from $ 15 billion to $ 20 billion by 2027. At the same time, the company points to a significant space in the market, as it says it has so far gained only a fraction of the share in the hospital and ambulatory practice segment. Its push to increase that market share comes at a time when healthcare providers are looking for technology tools to improve the efficiency of their administrative processes.[4]

Conclusion

Waystar Holdings' IPO was successful despite lower than projected proceeds from the sale of shares. With innovation, it has the potential to fill a huge space in the market and reduce its losses. The healthcare industry is constantly in need of new tools to streamline its operations, and Waystar has such capabilities. For investors, these factors may indicate future growth potential. [1]

Adam Austera, principal analyst at Ozios

* Past performance is no guarantee of future results.

[1] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or on the current economic environment, which may change. Such statements are not guarantees of future performance. They involve risks and other uncertainties that are difficult to predict. Results may differ materially from those expressed or implied by any forward-looking statements.

[1] https://investors.waystar.com/news-releases/news-release-details/waystar-deploys-generative-ai-simplify-healthcare-payments

[2] https://www.google.com/finance/quote/WAY:NASDAQ

[3] https://companiesmarketcap.com/waystar/total-debt/

[4] https://www.paymentsdive.com/news/waystar-healthcare-software-digital-payments-market/718225/

[1] https://companiesmarketcap.com/waystar/marketcap/

[2] https://www.morningstar.com/news/marketwatch/20240607356/waystars-stock-gets-jeered-in-its-wall-street-debut

[3] https://www.marketscreener.com/quote/stock/WAYSTAR-HOLDING-CORP-170812201/news/Waystar-CEO-Matt-Hawkins-talks-about-his-company-s-IPO-46932107/