Premier (PINC) Stock Forecast & Price Target

Premier Inc. has demonstrated robust growth with Performance Services net revenue increasing by 15% to $108 million, driven largely by growth in enterprise licenses and consulting services. The company reported overall revenue of $319 million, reflecting a year-over-year increase of 1.6%, and achieved non-GAAP Adjusted EBITDA of $106 million, marking a 5% rise from the previous year. The Supply Chain Services segment also showed strong performance, with revenue up 7.6% year-over-year to $179 million, supported by one-time payments from early contract terminations, while the segment's Adjusted EBITDA exhibited a notable 14% increase to $22 million.

Premier Inc. has lowered its revenue outlook for FY24, expecting total revenue of $1.31 billion, down 2% from previous estimates, primarily due to a projected 16% decline in product revenue and a 4% decrease in net admin fees. The company reported a 4% year-over-year decline in revenue from its supply chain services segment, contributing to concerns about its overall financial stability, with AEBITDA showing only modest growth. Additionally, the significant drop in free cash flow to $116 million in FY24, down from $264 million the previous year, combined with higher tax payments from a non-healthcare GPO sale, raises further concerns about cash generation capacity and long-term profitability.