WELL at 12x EBITDA: Have Fears Peaked, or Is the Market Right to Stay Skeptical?

WELL after the Circle Medical resolution: recovered numbers, hesitant trust

The key question now is whether the Circle Medical billing investigation was resolved marked the point where the worst was already priced in, or whether the 13% rebound is only a temporary relief move. The legal overhang has eased, but institutions remember the stock going down and still want concrete proof before they re-rate the shares.

That tension matters because the operating picture has improved faster than market confidence. WELL delivered record annual revenue of $1.40 billion in 2025, up 52%, while Adjusted EBITDA rose to $203.7 million. Even after removing one-time items, normalized revenue still grew 34%. That does not look like a business stuck in a downturn; it looks like operations are stabilizing while investors stay cautious.

Canadian clinics are becoming the clearest operating driver

The core story is no longer just about revenue growth. It is about whether WELL can keep converting that growth into profit and cash.

2025 showed real operating leverage

WELL's 2025 results went well beyond a simple cost-cutting story. The company reported record annual revenue of $1.40 billion, Adjusted EBITDA of $203.7 million, and record operating free cash flow attributable to shareholders of $58.2 million. Excluding one-time items, normalized revenue rose 34% and normalized Adjusted EBITDA rose 17%. That suggests the underlying business is still expanding, not just surviving.

Canada is accelerating ahead of schedule

The strongest proof is in Canadian Patient Services. In 2025, that segment delivered Canadian Patient Services revenue increased 39% to $444.3 million, while Adjusted EBITDA increased 43% to $58.1 million, supported by 13% organic growth. Revenue and profit are expanding together, which is exactly where investors start to pay closer attention.

The latest update strengthens that trend. Management now points to a CAD 100 million adjusted EBITDA run rate from Canadian clinics, reached three quarters ahead of schedule, with Canada normalized Q2 adjusted EBITDA growing approximately 56%. One quarter does not settle the debate, but it does make the Canadian clinic story harder to ignore.

WELL's Q1 2026 performance is solid, but sentiment still lags

Q1 2026 reinforced the operating improvement. Revenue reached $368.3 million, up 25% year over year; adjusted EBITDA rose 56% to $43.1 million; and patient visits increased 17% to 1.9 million. Canadian Patient Services revenue also rose 30% and adjusted EBITDA increased 28% in the segment. The operating read is clearly healthier than the stock price implies.

Still, the market has not fully closed the trust gap. Investors remain anchored to the delay in filing annual audited financial statements due to a matter related to US subsidiary Circle Medical, and even after management said the billing investigation involving CircleMedical has been resolved, confidence has not fully recovered. As long as institutions remember the stock going down, the shares will need repeated execution, not just one good quarter.

What keeps the skepticism alive

The bear case is not only about sentiment. Recent headlines show why investors are still cautious.

Recent coverage has highlighted financial reporting concerns, which helps explain why the market still treats WELL more like a trust issue than a pure operating story. In addition, the Competition Bureau investigation into WELL Health's acquisition of HEALWELL means regulatory scrutiny is still part of the backdrop.

That does not erase the operating progress. It simply means the market will keep demanding proof that the US reporting issues are truly behind the company and that expansion deals can move forward without fresh friction.

What would make WELL reasonable from here?

For the stock to look more attractive, management needs to keep the guidance credible long enough for sentiment to catch up. The clearest near-term test is the raised outlook, including the CAD 1.58 billion to 1.65 billion revenue guide. The latest call also points to adjusted EBITDA guidance rose to CAD 185–195 million, which gives investors a concrete benchmark for the next few quarters.

A successful WELLSTAR listing would also matter because it would show that capital markets are still willing to engage with WELL's growth businesses, not just tolerate them. And the removed Circle Medical billing investigation overhang would matter more if the market starts to treat it as resolved rather than as a warning sign that other issues may be lurking.

What to watch next

• Guidance: whether the company backs the CAD 1.58 billion to 1.65 billion revenue guide and higher EBITDA expectations through the next earnings cycle.
• WELLSTAR: whether WELLSTAR raised CAD 50 million ahead of its expected TSX Venture listing in September becomes a clean market test of investor demand.
• Trust markers: whether reports of financial reporting concerns fade after the delay in filing annual audited financial statements due to a matter related to US subsidiary Circle Medical is fully behind the company.
• Regulatory risk: whether the HEALWELL acquisition investigation stays contained or starts to weigh again on valuation.

If guidance slips or reporting and regulatory noise returns, the market may still be right to stay cautious. For now, WELL looks more reasonable than the headline skepticism suggests, but probably not yet fully proven.