As AI use in healthcare rises, Waystar is riding the wave

The healthcare manufacture is getting an AI boost — and immoderate players could spot large gains.

"Our apical prime successful 2026 is Waystar," Bank of America expert Allen Lutz wrote successful a caller report, highlighting the company's unsocial presumption astatine the intersection of high-growth bundle and the industry's monolithic administrative bottleneck. "The net aggregate should grow arsenic maturation proves to beryllium durable."

The firm's bull lawsuit for Waystar (WAY) rests connected the thought that its maturation is "too cheap" to ignore, adjacent arsenic the banal has faced a gauntlet of pressures and has fallen 20% successful the past year.

Lutz notes that the institution went done a play of "deal purgatory" pursuing its $1.25 cardinal acquisition of Iodine bundle successful precocious 2025, which lone precocious began to spot afloat operational integration.

There's besides the lingering fearfulness that UnitedHealth (UNH) Optum mightiness claw backmost marketplace stock mislaid during the 2024 Change Healthcare cybersecurity onslaught — a catastrophic outage that caused terrible currency travel problems and delayed diligent attraction for US hospitals.

"Hospitals are looking for caller gross rhythm vendors owed successful portion to Change Healthcare's cybersecurity breach," Lutz said. "And the accelerated maturation of AI is besides driving hospitals to marque changes to its platform."

This displacement is giving "differentiated" players similar Waystar an opening to summation ground.

Despite headwinds astir utilization and argumentation uncertainty, Waystar is maintaining an assertive consolidation strategy. Since its 2017 formation, the institution has executed much than 10 acquisitions and present processes implicit 7.5 cardinal transactions annually. Lutz estimates the roll-up strategy could unlock 400 to 500 ground points successful borderline upside arsenic the institution integrates AI and scales, starring the steadfast to contented a Buy standing and a $52 terms target.

The AI-centric worth proposition is what William Blair expert Ryan Daniels calls a displacement toward an "autonomous gross cycle."

"AI has the imaginable to revolutionize myriad gross rhythm absorption functions, which could reshape marketplace dynamics," Daniels said.

Waystar, helium argues, is among the cardinal players to payment from the revolution, specifically citing the company's "AltitudeAI" instrumentality designed to tackle the industry's $20 cardinal denial problem. Management claims the bundle tin make denial appeals 90% faster, cutting a 38-hour manual process down to conscionable two.

While Waystar stands out, Daniels besides pointed to Phreesia (PHR) and Health Catalyst (HCAT) arsenic cardinal players, though they run connected antithetic scales and specialities.