Value
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 3.7 |
| P/S | 7.7 |
| EV/EBITDA | 3.5 |
| Fwd P/E | 8.8 |
| PEG | 10.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 12.7x
- ▸PEG: 0.34
- ▸Attractively valued
WAY · Why this verdict
Why Waystar Holding (WAY) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictBUY WAIT
Overall score6.7/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Waystar's free cash flow is 260% of net income and it passes the Rule of 40 at a score of 51, indicating the business converts accounting earnings into real cash at a rate well above average and generates meaningful operating leverage. Quality breakdown | Free cash flow to net income ratio remains above 150% and the Rule of 40 score stays above 40 over the next 12 months. | →Stable |
| CounterHigh FCF-to-income ratios can reflect timing differences in working capital or deferred revenue recognition rather than sustained cash generation quality; healthcare software billing cycle changes could affect these metrics. | ||
Analysts have a consensus price target implying 82% upside to $30.44 from the current price of $18.55, which is the highest analyst conviction upside in the dataset, suggesting Wall Street sees substantial undervaluation relative to fundamentals. Sentiment breakdown | Price rises above $25, representing more than 35% appreciation from current levels, within 12 months as the technical downtrend reverses. | →Stable |
| CounterAn 82% gap between current price and analyst targets with price at its 52-week low often indicates the market is pricing in risks that consensus models do not adequately capture, such as contract loss or regulatory change. | ||
The stock has a confirmed death cross and trades below its 200-day moving average with the MA slope declining at -7.6% over 30 days, representing the hardest technical block to new position entry given the confirmed downtrend. Momentum breakdown | Price rises above the 200-day moving average and death cross reverses to a golden cross within 12 months. | →Stable |
| CounterDeath crosses in small-cap healthcare software often reflect sector rotation rather than company-specific deterioration; the underlying business fundamentals remain intact. | ||
Waystar has beaten EPS estimates in 3 of the last 4 quarters with an average positive surprise of 2.9%, suggesting execution quality is strong even as the stock price has declined into a downtrend. Earnings | Beat streak continues with EPS surprise positive in at least 3 of the next 4 quarters and no quarter missing by more than 5%. | →Stable |
| CounterOne miss of -9% in the most recent quarter suggests execution consistency may be slipping, and if the downtrend reflects anticipated guidance cuts, the beat streak could be interrupted. | ||
Waystar's free cash flow is 260% of net income and it passes the Rule of 40 at a score of 51, indicating the business converts accounting earnings into real cash at a rate well above average and generates meaningful operating leverage.
→StableQuality breakdown
- Expectation
- Free cash flow to net income ratio remains above 150% and the Rule of 40 score stays above 40 over the next 12 months.
CounterHigh FCF-to-income ratios can reflect timing differences in working capital or deferred revenue recognition rather than sustained cash generation quality; healthcare software billing cycle changes could affect these metrics.
Analysts have a consensus price target implying 82% upside to $30.44 from the current price of $18.55, which is the highest analyst conviction upside in the dataset, suggesting Wall Street sees substantial undervaluation relative to fundamentals.
→StableSentiment breakdown
- Expectation
- Price rises above $25, representing more than 35% appreciation from current levels, within 12 months as the technical downtrend reverses.
CounterAn 82% gap between current price and analyst targets with price at its 52-week low often indicates the market is pricing in risks that consensus models do not adequately capture, such as contract loss or regulatory change.
The stock has a confirmed death cross and trades below its 200-day moving average with the MA slope declining at -7.6% over 30 days, representing the hardest technical block to new position entry given the confirmed downtrend.
→StableMomentum breakdown
- Expectation
- Price rises above the 200-day moving average and death cross reverses to a golden cross within 12 months.
CounterDeath crosses in small-cap healthcare software often reflect sector rotation rather than company-specific deterioration; the underlying business fundamentals remain intact.
Waystar has beaten EPS estimates in 3 of the last 4 quarters with an average positive surprise of 2.9%, suggesting execution quality is strong even as the stock price has declined into a downtrend.
→StableEarnings
- Expectation
- Beat streak continues with EPS surprise positive in at least 3 of the next 4 quarters and no quarter missing by more than 5%.
CounterOne miss of -9% in the most recent quarter suggests execution consistency may be slipping, and if the downtrend reflects anticipated guidance cuts, the beat streak could be interrupted.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Waystar is a high-quality healthcare payments software company with a Piotroski F-Score of 9 out of 9, exceptional free cash flow conversion at 260% of net income, and 82% analyst upside, but is currently experiencing a confirmed price downtrend with negative momentum that blocks entry.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.2 |
| ROA | 2.2 |
| Gross margin | 9.7 |
| Op margin | 10.0 |
| Net margin | 5.5 |
| Current ratio | 6.3 |
| FCF quality | 10.0 |
| Moat | 7.1 |
| Rule of 40 | 8.3 |
| Piotroski F | 10.0 |
- ▸Excellent cash conversion: 260% FCF/NI
- ▸Rule of 40: 51 (pass)
- ▸Strong Piotroski F-Score: 9/9
Growth
8.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 8.1 |
| EPS growth | 9.5 |
- ▸Strong growth: 22% YoY
Momentum
7.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 2.3 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 10.0 |
| vol acceleration | 8.8 |
- ▸Overbought bear rally (RSI 80)
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -8.3%/30d — confirmed downtrend
- ▸Volume surge (2.4x avg) on up move
Sentiment
8.3/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.5 |
| Analyst rating | 9.0 |
| Price target | 9.3 |
- ▸Analyst upside: 44%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
5.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.7 |
| quality rank | 7.2 |
| growth rank | 7.1 |
- ▸Best-in-class margins
Technical
1.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.4 |
| 52w position | 1.3 |
| gap | 4.0 |
Risk (lower is worse)
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.2 |
| days to cover | 4.8 |
| volatility | 1.7 |
| put call | 0.0 |
| implied vol | 0.3 |
| beta | 10.0 |
| debt equity | 8.5 |
| news risk | 5.0 |
- ▸Elevated put/call: 2.00
- ▸High IV: 78%
Catalyst
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 4.0 |
| news activity | 8.0 |
- ▸Strong earnings: 3B/1M
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more. | News modifier +2 (HOLD_IF_HOLDING → STRONG_BUY_WAIT).
Engine technical detail
verdict_path:
L4:PATH_F_HOLD|L3:NEWS_MOD=+2|ENTRY_STICKY:PRIOR_STILL_VIABLEPassed (8)
- MOMENTUM:7.9>=5.5
- ASYMMETRY:1.9>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_BOOST:ANALYST_CLUSTER(5)
- EARNINGS_PROXIMITY:26d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (1)
- DEATH_CROSS:momentum=7.9>=5.0 recovering
Reward-to-Risk
1.95
Upside
+29.2%
Downside
15.0%
Sizing output
STARTER
SetupRecovery — Death cross but MACD improving, RSI 80
EdgeCatalyst-Driven — Earnings in 26d with 3/4 beat streak
SuitabilitySpeculative — Drawdown -44% (>40% off 52w high)
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:7.9>=5.5. Top dim: Growth at 8.8; weakest: Technical at 1.4. No conviction either direction.
The strongest dimensions are Growth at 8.8, Sentiment at 8.3, and Momentum at 7.9; the weakest are Technical at 1.4, Risk (lower is worse) at 4.6, and Peer rank at 5.0. The V9 engine cleared all gates with 1 warning, producing an asymmetric reward-to-risk of 1.95 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Exceptional Free Cash Flow Quality
Trip ifFree cash flow drops below 100% of net income for 2 or more consecutive quarters, indicating deteriorating cash conversion quality.
- P2Massive Analyst Upside Potential
Trip ifAnalyst consensus price target falls below $22, more than 25% below the current target of $30.44.
- P3Confirmed Downtrend Death Cross
Trip ifPrice drops below $15, more than 19% below the current $18.55, indicating an acceleration of the downtrend.
- P4Strong Earnings Beat History
Trip ifEPS surprise falls below -10% in at least 2 of the next 4 quarters, breaking the historical beat pattern.