Premier, Inc. (NASDAQ:PINC) shares fell more than 1% intra-day today after Piper Sandler analysts lowered their price target on the stock to $21 from $22 while maintaining a Neutral rating. The analysts noted that Premier delivered better-than-expected fiscal fourth-quarter 2024 results, including revenue, adjusted EBITDA, and earnings per share, largely due to non-recurring early-term fees in the Supply Chain Services (SCS) segment and strong bookings in Performance Services.
However, guidance for fiscal year 2025 fell short of expectations, even after accounting for a change in non-healthcare group purchasing organization (GPO) accounting. The analysts described Premier as a business in transition, particularly with a new CFO, experienced in turnarounds, set to join in November. Despite a recent win with AllSpire demonstrating competitiveness, the analysts anticipate Premier will continue to face adjusted EBITDA pressure through fiscal years 2025 and 2026 as its GPO base renews.
Looking ahead, the analysts rolled estimates forward to fiscal 2026 and slightly raised Premier's valuation multiple to 10x, reflecting optimism for stabilization in share-back rates.