Pullback in HNGE & OMDA present a better setup into earnings; Reiterate OWs

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Pullback in HNGE & OMDA present a better setup into earnings; Reiterate OWs

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August 3, 2026 04:00 AM GMT

Morgan Stanley & Co. LLCMHealthcare Technology | North America Craig Hettenbach

Equity Analyst

Pullback in HNGE & OMDA Craig.Hettenbach@morganstanley.comJialin Jin +1 212 761-6435

Research Associate

Jay.Jin@morganstanley.com +1 212 761-3913

present a better setup into Erin Wright

Erin.Wright1@morganstanley.com +1 212 761-6137

earnings; Reiterate OWs Linda Bolduc

Linda.Bolduc@morganstanley.com +1 617 856-8009

As recently as 3 weeks ago, HNGE and OMDA stocks were Michelle Foley

overheated. However, a 20% pullback into Q2 earnings presents ResearchMichelle.Foley@morganstanley.comAssociate +1 212 761-4056

a more attractive risk/reward. We expect both reports to Derek Gross

highlight strong momentum in the businesses and additional ResearchDerek.Gross@morganstanley.comAssociate +1 212 761-2455

levers for margin expansion. Katherine A Bennorth

Recent selloff has changed the setups for HNGE and OMDA: In our earnings Katie.A.Bennorth@morganstanley.com +1 212 761-3753

preview 3 weeks ago (see - 2Q Earnings Playbook: Eyes on Utilization), we Healthcare Technology

emphasized a high bar for HNGE and OMDA following significant stock North America

Industry View In-Line

outperformance, presenting a materially different setup relative to the last few

quarters. Since that time, both stocks had traded off ~20%, helping to shape a

better risk/reward into prints.

Valuation is looking more compelling following the pullback ( Exhibit 1 ) and we see

~45% and ~55% upside potential to our PTs of $108 and $30 for HNGE and OMDA,

respectively. Notably, HNGE's YTD stock gain of 61% has been entirely driven by a

61% increase in 2026 EBIT estimate since the start of the year, and we view new