Citizens has lowered its price target on Waystar Holding (NASDAQ: WAY) to $34 from $48 but retained a Market Outperform rating on the shares. The firm attributed the reduction in its target price to broader multiple compression across the software sector rather than to a change in its view of Waystar's underlying business.
Under the new valuation, Citizens applies a 15x multiple to a revised 2026 EBITDA estimate of $533 million. That contrasts with the prior valuation, which used a 21x multiple on an earlier 2026 EBITDA estimate of $523 million. Waystar's most recent reported EBITDA stands at $391.95 million, and the company currently trades at an enterprise-value-to-EBITDA multiple of 15.47x. The stock was quoted at $24.31 and has fallen about 46% over the past year and nearly 26% year-to-date.
In its note, Citizens highlighted several elements of Waystar's positioning that it believes will help address investor concerns related to AI themes in the sector. The firm pointed to management's messaging on the increasingly AI-enabled nature of Waystar's solutions, the value of its unique, scaled and proprietary data set, the network effects associated with platform participation, multi-sided connectivity and the breadth of the company's solution suite. Citizens emphasized that these attributes operate within a highly regulated and security-sensitive healthcare ecosystem.
Citizens said it remains constructive on Waystar for a number of reasons it views as durable and value-supportive: an AI-related product cycle, the impact of the Iodine acquisition, high margins, strong cash generation and what it described as a durable and predictable financial model. The analyst who issued the rating change was Constantine Davides.
Separately, Waystar reported robust fourth-quarter 2025 results. The company posted revenue of $304 million for the quarter, representing a 24% increase versus the prior year. Earnings per share were $0.36, coming in above market expectations. Citizens linked the strong quarterly performance to Waystar's AI-driven solutions and strategic acquisitions, and noted that while the stock saw a notable surge, attention remains focused on the company's competitive position in the healthcare revenue cycle management market.
Analysis and context
Citizens' move reduces the firm's implied valuation multiple for Waystar while leaving its qualitative view of the company's prospects largely intact. The adjustment reflects sector-wide valuation dynamics - specifically, a compression of software sector multiples - which in turn reduces the upside implied by prior targets even as management-executed initiatives and recent operational performance are cited as supportive.
- Valuation change - Price target lowered to $34 from $48 using a 15x multiple on $533 million of 2026 EBITDA versus prior 21x on $523 million.
- Operational metrics - Current reported EBITDA is $391.95 million and the company trades at an EV/EBITDA of 15.47x.
- Recent results - Q4 2025 revenue of $304 million, up 24% year-over-year, and EPS of $0.36, beating expectations.
Citizens' commentary underscores that while headline valuation has been reduced, the analyst team views Waystar's structural strengths - including AI integration, proprietary data and platform network effects - as factors that should temper investor concerns tied to AI narratives over time, particularly given the regulatory and security sensitivities of healthcare.
What's next
Investors will likely weigh the lower valuation multiple against the company's recent revenue and earnings momentum, its stated AI roadmap and integration of the Iodine acquisition. Citizens' stance keeps a constructive tilt on the name but reflects a more cautious price objective driven by sector valuation trends.