Below we have summarized the key trends in Pitchbook’s Public Comp Sheet & Valuation Guides for Healthcare Services and Digital Health/HealthcareIT – two major sectors we focus on at Seed Healthcare.

Healthcare Services – Healthcare services have shown varied performance. Hospitals, rehabilitation, and long-term care stocks are outperforming major indexes, with behavioral health and home-based care stocks also showing gains. In contrast, payers, payviders, and value-based care (VBC) stocks have underperformed the S&P 500 and Nasdaq, with VBC stocks hit hard by unprofitability and high utilization rates.

The IPO landscape has seen notable activity. Skilled nursing facility operator PACS Group raised $450 million in a successful April IPO, projecting double-digit revenue growth and a 10% EBITDA margin. Meanwhile, Equity Group Investments-backed Ardent Health Services, a 30-hospital system, has confidentially filed for an IPO. Comparables like CHS, HCA, Tenet, and UHS trade at high-single-digit EBITDA multiples.

Retail giants are also repositioning. Walgreens is reducing its stake in VillageMD, shifting away from high-risk ventures, while CVS seeks private equity funding to expand Oak Street Health’s senior-focused primary care clinics. This mixed performance within healthcare services highlights a dynamic landscape where strategic shifts and market adaptability are crucial for success.

Digital Health/Healthcare IT – Digital health and healthcare IT stocks have broadly underperformed major indexes this year. Virtual care and remote patient monitoring have been the hardest hit, while provider operations companies are also lagging. Consumer-facing digital health companies face challenges from crowded markets, reduced VC funding, and limited patient demand for virtual-first models. The digital therapeutics sector has seen many major players wind down or get acquired due to challenging reimbursement pathways.

A bright spot for the sector was Waystar’s successful IPO in June, raising nearly $1 billion despite not yet being profitable. The company boasts double-digit revenue growth and a 42% EBITDA margin. Additionally, New Mountain Capital offered to take R1 RCM private, with another major shareholder finalizing a higher bid. Publicly traded healthcare IT stocks face pricing pressure, with most categories trading at a median of less than 3.0x TTM revenue, down from over 5x in 2021.

In the pharmacy and personalized health segment, companies like GoodRx and 23andMe are significantly below their 2021 peaks. However, shares of Hims & Hers have approached all-time highs, partly due to their expansion into weight loss drugs. This could lead to rising valuations and future VC investment if virtual metabolic health solutions gain traction and generate meaningful revenue growth.