Raymond James downgrades Phreesia stock rating on slowing growth

Raymond James recently downgraded Phreesia Inc. (NYSE:PHR) stock rating to Market Perform from Outperform due to concerns over slowing organic revenue growth. The downgrade comes after the company's second-quarter fiscal 2027 earnings, which showed decelerating revenue growth of 3.5% year-over-year in the first half, with a further expected decline to negative 0.5% in the second half.

Raymond James cited uncertainty around the company's planned increase in artificial intelligence investments and the potential impact on EBITDA growth. The firm also noted that Phreesia's customer base of health systems and provider groups is facing a more challenging environment that could restrict budgets. Despite these concerns, Phreesia's valuation of approximately 4.5 times calendar year 2027 EBITDA is considered not demanding.

The stock has declined 7.6% over the past week and is down 35% year-to-date, trading at $10.94 with a market cap of $679 million.

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