Healthcare software has had a rough 2026. According to Dedale Intelligence's latest market update, the peer group of listed healthcare software companies is down 20% year to date, even as the S&P 500 and Nasdaq posted double-digit gains. Beneath that headline, the picture is more nuanced: a handful of profitable, scaled names are holding valuation premiums while most of the market, dominated by small caps split almost evenly between the US and Europe, continues to re-rate lower.

This update draws on Dedale Intelligence's comparables analysis of the listed healthcare software ecosystem, spanning EHR and HIS platforms, ambulatory care, and point solutions across clinical and non-clinical functions. For a deeper look at two of the largest sub-segments, see Dedale Intelligence's US Electronic Health Records Software report and the Practice Management Software in Healthcare report. For broader software market context, see Dedale Intelligence's October 2026 software market trends article.

A fragmented, small-cap-led peer set

Dedale Intelligence's comparables analysis shows the listed healthcare software universe is dominated by small caps, split almost evenly between the US and Europe. Only a handful of names have scaled past the $1 billion mark: HealthEquity ($7.4bn), Sectra ($5.9bn) and Doximity ($5.3bn) are the three largest, while the rest of the peer set, from HealthStream ($1.03bn) down to Enlitic ($2m), remains small and lower valued.

The group also keeps shrinking, according to Dedale Intelligence's tracking of delistings and take-private activity: Forian was taken private in 2026, iCoreConnect and VSee were removed from Nasdaq, and Definitive Healthcare has received a non-binding take-private proposal from Advent at $1.02 a share. Dedale Intelligence identifies four structural drivers of valuation across the space: company HQ location, size, Rule of 40 (revenue growth plus free cash flow margin), and offering type, whether healthcare administration, healthcare clinical, telehealth and patient experience, or data analytics.

Stock performance: healthcare software trails the market

Dedale Intelligence's analysis shows healthcare software has broadly lagged the wider market. The peer median is down 20% year to date and 15% over the last 24 months, against gains for both the S&P 500 (13% YTD, 33% over 24 months) and the Nasdaq (15% YTD, 46% over 24 months).

Investors have been selective, per Dedale Intelligence's company-level tracking. Consensus Cloud Solutions (up 61% YTD), HealthStream (up 46% YTD) and Sectra (up 23% YTD) have been rewarded for profitability, while all four telehealth names, Teladoc, LifeMD, Oneview and Doximity, are down year to date, and small caps such as Enlitic (down 79% YTD) and Definitive Healthcare (down 66% YTD) have sold off sharply.

See how your own healthcare software exposure compares: get in touch with Dedale Intelligence to discuss a tailored valuation benchmark.

Growth slows, margins compress, but FY27e points to a recovery

Dedale Intelligence's financial analysis shows fundamentals have softened over the past year. Average sales growth across the peer set slowed from 4.2% to 2.2%, and the average Rule of 40 score fell from 16.5% to 11.6%. Sales and marketing intensity rose from 22.6% to 25.0% of revenue, led by LifeMD, Oneview and RaySearch, while R&D spending stayed broadly stable at 20.7% of revenue.

Dedale Intelligence's forecasts point to a recovery. Group sales growth is expected to rise from 4.0% in FY26e to 9.6% in FY27e, and Rule of 40 from 25.2% to 34.6%, led by Physitrack, Nordhealth, LifeMD and Oneview, although analyst coverage remains partial for the smaller names in the group.

Valuation: multiples well below long-term averages, and scale is the driver

Dedale Intelligence's valuation analysis shows healthcare software multiples have compressed materially from their 2021 peak. The peer median now trades at 2.3x EV/Sales NTM and 7.5x EV/EBITDA NTM, against long-term averages of 3.6x and 13.4x respectively.

Dedale Intelligence's research identifies scale, not profitability, as the clearest driver of that gap. Mid caps trade at 5.6x EV/Sales NTM versus 1.5x for small caps, and healthcare clinical players command 4.4x versus 1.7x for healthcare administration. Rule of 40 explains only around 20% of EV/Sales dispersion across the peer set, and Doximity (6.9x) illustrates that relationship best. Sectra (13.3x) and Oneview (3.8x) both trade well above peers without clearing the Rule of 40 threshold, a reminder that much of the premium in this market still comes down to a handful of outliers rather than a broad re-rating.

Consolidation continues: take-privates and strategic M&A reshape the peer set

Dedale Intelligence tracks M&A and take-private activity closely across healthcare software, and the listed universe keeps shrinking as a result. In 2026 alone, Francisco Partners agreed to take Weave private at $7.40 a share (a 34% premium, 2.7x EV/Revenue), India-based IKS Health agreed to acquire TruBridge at $26.25 a share (1.6x EV/Revenue) to expand its US rural hospital presence, and hospital operator UHS acquired online therapy platform Talkspace at $5.25 a share (3.4x EV/Revenue) to build out its virtual behavioral health offering.

These 2025 and 2026 deals follow a run of large strategic acquisitions that Dedale Intelligence has tracked since 2021, including Oracle's $28.3 billion purchase of Cerner (5.1x EV/Revenue) and Microsoft's $19.7 billion acquisition of Nuance the same year (14.5x), both of which remain reference points for how acquirers value clinical and administrative healthcare software at scale.

What this means for dealmakers

Dedale Intelligence advises PE investors, corporate development teams and M&A advisors navigating exactly this kind of bifurcated market: a small group of scaled, profitable, clinically-focused assets commanding durable premiums, and a long tail of small-cap names still working through de-ratings, delistings and take-privates. With forecasts pointing to a growth and Rule of 40 recovery from FY27e, the entry points created by this de-rating could prove attractive to investors willing to underwrite that recovery, and Dedale Intelligence's ongoing coverage of the space is built to help them do exactly that.

Download the full Healthcare Software Market Update and Comparables report for the complete company tables, valuation breakdowns and deal tracker.

To discuss how this analysis can support a healthcare software investment thesis, contact the Dedale Intelligence team.