TBRG

TruBridge ($TBRG) CBO Buys $1M in One Week...Forward P/E 9.81x Undervaluation Opportunity

11/20/2025 16:02

TruBridge ($TBRG) is capturing investor attention as the healthcare IT services company's top executives and major shareholders have engaged in concentrated buying activity throughout November, sparking interest in investment opportunities at current price levels. TruBridge is a healthcare information services company founded in 1979, providing revenue cycle management (RCM) services and patient care software to community hospitals and healthcare systems. The company rebranded from Computer Programs and Systems in March 2024 to its current name, pursuing a strategic shift focused on integrated healthcare IT solutions. With approximately 3,200 employees, this mid-cap company generates $347.2 million in revenue. The most notable development is the strong buying signal from senior management. Chief Business Officer Michael Daughton purchased approximately $1 million worth of company shares in just one week from November 11-17. His purchases included 15,479 shares ($300K) on November 11, 10,167 shares ($203K) on November 12, 4,354 shares ($88K) on November 13, 2,500 shares ($50K) on November 14, and 17,500 shares ($358K) on November 17. Average purchase prices ranged from $19.39 to $20.46 per share, demonstrating strong conviction near the current trading level of $20.83. Major institutional investors are also making moves. L6 Holdings purchased continuously from November 12-19, acquiring 94,756 shares for approximately $1.94 million at an average price of $20.47 per share. Another major shareholder, Pinetree Capital, conducted large-scale purchases in February 2025 at $27-28 per share levels, suggesting key investors view current prices as attractive. This insider buying coincides with fundamental improvements. TruBridge reported Q2 2025 earnings per share of $0.18, beating analyst expectations and turning profitable from a $0.34 per share loss in the prior year. Revenue also grew 1.2% year-over-year to $85.7 million. Operating cash flow of $38.4 million demonstrates solid cash generation capabilities, providing financial flexibility for both debt service and growth investments. Valuation metrics appear compelling. The forward P/E ratio of 9.81x is significantly below the industry average of around 20x. The EV/Revenue ratio of 1.31x also compares favorably to the industry average of 2x, suggesting the market may not fully reflect the company's growth potential. However, there are considerations for investors. The company's projected revenue growth rate of 3.9% annually over the next three years lags the healthcare services industry average of 10%. Net profit margins remain thin at 1.03%, indicating significant room for profitability improvement. The debt-to-equity ratio of 92.52% represents moderate leverage, creating potential interest rate sensitivity. Despite these factors, current conditions present an intriguing opportunity. With shares trading about 30% below early 2025 peaks near $30, aggressive buying by management and major shareholders could signal a bottom. The CBO's consecutive purchases, based on deep internal knowledge, likely reflect confidence in future performance improvements. Key factors to monitor include the rollout speed of the CHBase platform integration and patient engagement solutions like InstantPHR. Margin improvement through expanded RCM services will also be crucial. Whether recent insider buying reflects opportunistic low-price purchases or genuine conviction about upcoming growth catalysts should become clearer through upcoming quarterly results. Risk factors include intensifying competition from larger players like HealthStream, Premier, and Omnicell. Healthcare regulatory changes or IT standard modifications could also impact operations. Some institutional selling activity may create short-term price pressure. With analyst price targets ranging from $20-28 per share and insider buying concentrated around $20, downside risk appears limited at current levels. Given solid cash flow and improving profitability, a medium-term target of $25 appears achievable.