Company Overview - Waystar provides a cloud-based software platform focused on healthcare payments, including financial clearance, patient financial care, claims and payment management, denial prevention, revenue capture, and analytics solutions [5][8] - The company generates revenue through subscription and transaction-based fees, primarily serving hospitals, physician groups, and other healthcare organizations [12] Financial Performance - As of Thursday, Waystar's stock was priced at $33.08, with a market capitalization of $6 billion [5] - The company reported a total revenue of $1.04 billion and a net income of $111.18 million for the trailing twelve months (TTM) [5] - In the third quarter, Waystar achieved revenue of $268.7 million, reflecting a year-over-year growth of 12%, alongside an adjusted EBITDA margin of 42% and a net revenue retention rate of 113% [9] Recent Developments - Westwind Capital sold its entire position in Waystar, liquidating 420,897 shares for an estimated $15.96 million, reducing its stake to zero [2][3][6] - This position had previously represented 3.3% of Westwind Capital's assets under management (AUM) [4][6] - Despite Waystar's recent growth, Westwind Capital's decision to exit indicates concerns over the stock's performance, which has declined nearly 12% over the past year, underperforming the S&P 500 by nearly 30 percentage points [4][10] Market Position and Strategy - Waystar is positioned in the healthcare payments sector, benefiting from structural tailwinds in healthcare payments automation [11] - The company is scaling profitably, generating $82 million in operating cash flow in the quarter, but faces leverage and integration risks following recent acquisitions [11]

Group 1 - Waystar Holding Corp. (NASDAQ:WAY) is considered a promising mid-cap healthcare stock with a current price target of $41, indicating a potential upside of nearly 25% for investors [1][2] - The company's growth prospects are bolstered by its strategic focus on AI-enabled automation in revenue cycle management, which is expected to enhance efficiency and cost-effectiveness [2] - Waystar's acquisition of Iodine Software is part of its inorganic growth strategy, aimed at expanding its addressable market and improving client retention through cross-selling opportunities [2] Group 2 - Market sentiment towards Waystar is highly positive, with 16 out of 17 analysts giving a Buy rating, resulting in an estimated 1-year average price target of $48.44, implying a 47.5% upside from the current level [3] - Waystar offers a comprehensive cloud-based software platform for payment processing in the healthcare industry, covering functions such as payment clearance, claims management, revenue capture, reporting, and analytics [4]

Core Insights - The Barclays TMT Conference is being held, focusing on the technology, media, and telecommunications sectors, with a specific emphasis on software [1][2] - Waystar's team, including CEO Matt Hawkins and Head of Investor Relations Sue Dooley, is present at the conference, indicating the company's engagement with investors and stakeholders [1] Company Engagement - The session is structured to allow for a 30-minute discussion, with a significant portion dedicated to an interactive fireside chat with the CEO, highlighting the importance of direct communication with investors [2] - The format encourages audience participation, suggesting a focus on transparency and investor relations [2]

Summary of Waystar FY Conference Call Company Overview - **Company**: Waystar (NasdaqGS:WAY) - **Industry**: Healthcare technology, specifically focused on revenue cycle management - **Business Model**: Cloud-native software platform assisting healthcare providers in interactions with insurance companies and patients to enhance payment efficiency and accuracy [8][9][10] Key Highlights - **Client Base**: Serves over 1 million providers, including 17 of the top 20 hospitals in the U.S., reaching approximately 50% of the U.S. patient population [8][9] - **Financial Performance**: Achieved six consecutive quarters of revenue and EBITDA beats above analyst consensus; updated full-year 2025 guidance reflects $1.09 billion in revenue, indicating a 12% year-over-year growth [10][12] - **Profitability**: Maintains over 40% Adjusted EBITDA margins, positioning itself as a "Rule of 50" business [12][13] Revenue Cycle Management Insights - **Process Overview**: Waystar's platform automates the revenue cycle from front-end patient eligibility verification to back-end claims processing, significantly reducing manual tasks and inefficiencies [24][27][29] - **Claims Processing**: Processes 6 billion insurance claims annually, representing nearly $2 trillion in gross claim charges, with a first-pass claim acceptance rate of nearly 99% [27][29] - **AI Integration**: Utilizes AI to enhance efficiency in claims processing, including automated appeal letters for denied claims, which improves turnaround time and accuracy [28][62] Market Trends and Growth Drivers - **Utilization Trends**: Historical growth in patient visits is modeled at 1%-2% annually; current trends indicate higher utilization due to increased patient engagement in high-deductible health plans [46][47] - **Cross-Selling Opportunities**: Significant potential to cross-sell solutions between Waystar and Iodine clients, with a 35% overlap in client bases [90][91] - **AI Adoption**: Over 30% of year-to-date bookings have come from new AI solutions, indicating strong market demand for AI-driven capabilities [64][70] Financial Outlook - **Growth Projections**: Long-term organic revenue growth target remains in the low double digits; year-to-date growth is approximately 14% [88][89] - **Capital Structure**: Strong free cash flow conversion exceeding 80% of Adjusted EBITDA, providing flexibility for future investments and capital allocation [99][103] Additional Insights - **Client Retention**: High gross revenue retention rate of 97%, with opportunities to enhance client relationships through AI integration [78] - **Market Positioning**: Waystar aims to leverage proprietary data to train AI models, positioning itself as a leader in the revenue cycle management space [61][65] This summary encapsulates the key points discussed during the Waystar FY conference call, highlighting the company's performance, market position, and future growth strategies.

Core Insights - The company is addressing a significant problem for health care providers by offering an end-to-end platform that integrates various services, which is crucial in a crowded competitive landscape [1] Competitive Dynamics - The competitive field is described as quite crowded, highlighting the importance of differentiating through a modular approach compared to full-stack outsourcing solutions [1]

Financial Data and Key Metrics Changes - The company reported a standalone growth rate of 8% year-over-year for Q4, indicating strength in the business [48] - Revenue mix is approximately 50% subscription and 50% volume-based, allowing the company to capture upside from increased utilization [18] Business Line Data and Key Metrics Changes - The company is seeing significant demand for multiple sales solutions and platform-type opportunities, particularly as clients seek to reduce the number of vendors in their ecosystem [15][16] - The acquisition of Iodine is expected to enhance the company's ability to submit "perfect undeniable claims," improving the overall claims process [10][12] Market Data and Key Metrics Changes - The company has a total addressable market opportunity of over $17 billion, with low penetration in the high single digits [43] - Utilization has been strong, with continued patient engagement leading to increased revenue opportunities for healthcare providers [18] Company Strategy and Development Direction - The company aims to build, buy, or partner in the digital front door market to enhance patient engagement and revenue capture [44] - There is a focus on autonomous coding as a means to improve efficiency and accuracy in claims processing [45] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining long-term low double-digit revenue growth and strong free cash flow conversion [51] - The company is cautiously optimistic about the future, with no immediate changes expected in growth expectations [51] Other Important Information - The company has a high gross revenue retention rate of 97% and typically sees annual price increases of 3-4% [24] - The generative AI solutions have shown significant early reception, with clients reporting a 70% decrease in prior authorization times and a 90% reduction in time for denials and appeals management [21][22] Q&A Session Summary Question: How has the sales cycle shaped up this year versus prior years? - Management noted strong activity in the pipeline and demand for multiple sales solutions, particularly from health systems and hospitals [14][17] Question: Can you discuss the impact of AI on your technology stack? - The company highlighted the integration of over 160 AI modules from Iodine, which enhance the processing of unstructured data into clinical codes [13] Question: What is the competitive dynamic in the market? - Management emphasized the differentiation in ROI and client experience compared to legacy competitors and new entrants, highlighting the importance of a high-touch client experience [29][30] Question: What are the future opportunities for growth? - The company is exploring opportunities in the digital front door market and autonomous coding, aiming to address client pain points and enhance service offerings [44][45]

Financial Data and Key Metrics Changes - The company reported a strong standalone growth rate of 8% year-over-year for Q4, indicating robust business performance [48] - Revenue mix is approximately 50% subscription and 50% volume-based, allowing the company to capture upside from increased utilization [19] Business Line Data and Key Metrics Changes - The acquisition of Iodine for $1.25 billion enhances the company's capabilities in clinical documentation, contributing to the goal of submitting "perfect undeniable claims" [10][12] - There is a notable uptick in demand for multiple sales solutions and platform-type solutions, particularly as clients seek to reduce the number of vendors in their ecosystem [16][18] Market Data and Key Metrics Changes - The company has seen strong utilization trends over the past five to six quarters, which is expected to continue, contributing positively to revenue growth [19] - The health system and hospital market remains a primary focus, with a significant portion of RFPs coming from these sectors [18] Company Strategy and Development Direction - The company aims to maintain a competitive edge through a high-touch client experience and a focus on ROI, differentiating itself from legacy competitors [30][31] - Future opportunities include expanding into the digital front door market and exploring autonomous coding solutions to enhance efficiency [45][46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the durability of revenue growth, projecting low double-digit growth rates in the long term [52] - The company is focused on leveraging generative AI to improve operational efficiencies and client outcomes, positioning itself as a trusted partner in the healthcare ecosystem [34][42] Other Important Information - The company has a total addressable market opportunity exceeding $17 billion, with low current penetration, indicating significant growth potential [44] - The company maintains strong partnerships with EHR vendors, which helps in navigating the competitive landscape [32] Q&A Session Summary Question: How has the sales cycle shaped up this year versus prior years? - Management noted strong activity in the pipeline and demand for multiple sales solutions, indicating a positive trend in client engagement [16] Question: What is the impact of AI on the competitive dynamic? - Management believes that while AI presents opportunities, it also reinforces the need for trusted vendors like Waystar to navigate the complexities of the healthcare ecosystem [34] Question: Can you comment on the size of the clearinghouse business? - The clearinghouse business is a meaningful portion of revenue, particularly in the ambulatory sector, and there are ongoing cross-sell opportunities [40][38] Question: What are the growth expectations for 2026? - Management reiterated long-term targets of low double-digit revenue growth and strong EBITDA margins, with no significant changes anticipated [52]

Core Viewpoint - Waystar Holding (WAY) has seen a 3% increase in share price over the past four weeks, closing at $36.91, with a potential upside of 34.6% based on Wall Street analysts' mean price target of $49.67 [1][11]. Price Targets and Analyst Estimates - The mean estimate consists of 18 short-term price targets with a standard deviation of $3.11, indicating a consensus among analysts. The lowest estimate is $44.00 (19.2% increase), while the highest is $54.00 (46.3% increase) [2][9]. - Analysts' price targets can often mislead investors, as empirical research shows they rarely indicate actual stock price movements [7][10]. - A low standard deviation in price targets suggests a high degree of agreement among analysts regarding the stock's price direction, which can serve as a starting point for further research [9]. Earnings Estimates and Analyst Optimism - Analysts have shown growing optimism regarding WAY's earnings prospects, as indicated by a positive trend in earnings estimate revisions. This correlation between earnings revisions and stock price movements supports the expectation of an upside [4][11]. - Over the last 30 days, three earnings estimates for WAY have been revised upward, leading to a 2% increase in the Zacks Consensus Estimate [12]. - WAY holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate factors, indicating strong potential for near-term upside [13]. Conclusion on Price Movement - While the consensus price target may not be a reliable indicator of the extent of potential gains, the implied direction of price movement appears to be a useful guide for investors [14].

Group 1: Artisan Small Cap Fund Overview - Artisan Small Cap Fund's third-quarter 2025 investor letter indicates a strong performance in global equities, with major US indices reaching record highs and double-digit year-to-date gains [1] - The fund's Investor Class fund ARTSX returned 8.69%, Advisor Class fund APDSX returned 8.75%, and Institutional Class fund APHSX returned 8.73%, compared to a 12.19% return for the Russell 2000 Growth Index [1] Group 2: Waystar Holding Corp. Analysis - Waystar Holding Corp. is highlighted as a key investment, being a cloud-based software solution developer for healthcare payments, with a one-month return of -8.61% and a 52-week gain of 9.80% [2] - As of November 17, 2025, Waystar's stock closed at $34.29 per share, with a market capitalization of $6.56 billion [2] - The fund initiated new positions in Waystar, viewing it as well-positioned to benefit from the fallout of a cyberattack on its largest competitor, Change Healthcare, and from integrating AI capabilities into its software [3] Group 3: Financial Performance of Waystar - In the third quarter of 2025, Waystar recorded revenue of $269 million, reflecting a 12% increase compared to the same period last year, with an adjusted EBITDA margin of 42% [4] - Despite acknowledging Waystar's potential, the fund suggests that certain AI stocks may offer greater upside potential and carry less downside risk [4]

Core Insights - Waystar Holding Corp. is recognized as a leading digital health stock, with Mizuho Securities raising its target price from $48 to $50 following strong Q3 earnings, driven by high demand for its revenue cycle management solutions [1][2] - The company's Q3 report indicated a 12% revenue increase to $268.7 million, with adjusted EBITDA at $112.7 million, reflecting a 42% margin, attributed to steady transaction volume and client adoption [2] - Management has raised full-year revenue targets to between $1.085 billion and $1.093 billion, and adjusted EBITDA targets to between $451 million and $455 million, indicating confidence in future growth [2] Company Overview - Waystar Holding Corp. specializes in healthcare payments and revenue cycle technology, providing cloud-based software for hospitals, physician groups, and care organizations to manage claims processing, billing, and patient financial interactions [3]