Jefferies Cuts Price Target on HMS Holdings Corp. (HMSY) to $19 Following 3Q Report
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Jefferies maintained a Hold rating on HMS Holdings Corp. (NASDAQ: HMSY), and cut the price target to $19.00 (from $23.00), following the company's 3Q earnings report. 3Q revenue increased $4M sequentially but missed estimates by $2.2M. Growth was ~14% YoY, compared to estimates of ~12.5% organically. Part of the shortfall related to delays in four implementations that pushed $2M of revenue into 4Q. Management's retained an 18-20% growth target.
Analyst David Windley commented, "HMSY's Commercial plan contract traction was less evident in 3Q revenue. Low taxes drove all the 3Q EPS upside plus a penny. Restoration of some RAC revenue offset by lower Commercial revenue keep our consolidated estimates fairly constant for '16 and '17. The threat to Medicaid Expansion is a new risk. We are lowering our PT to $19 on Medicaid uncertainty and slower Commercial growth."
Shares of HMS Holdings closed at $16.80 yesterday.
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