White Brook Capital, LLC on CareCloud, Inc.
Thesis
CareCloud supplies physician and hospital billing, electronic medical records and AI software. White Brook attributes the market's concern to acquisition-related costs, heavier AI spending, interest expense and a recent cyberattack rather than weak revenue growth. Revenue still rose 16%, while retirement of preferred shares saves approximately $3.3 million annually. At around eight times the midpoint of 2026 GAAP EPS guidance, the fund sees a relatively inexpensive software business with upside if acquisition integration improves margins.
“CareCloud offers double-digit revenue growth at a modest earnings multiple”
Key risks
- Acquisition integration spending has depressed net income and may persist.
- Higher debt interest expense and AI investment costs may limit earnings recovery.
- A cyberattack disrupted operations and insurance may not fully cover associated costs.