Auriga Initiates Coverage on MedAssets (MDAS) with a Buy

June 11, 2009 8:09 AM EDT

Auriga initiates coverage on MedAssets (Nasdaq: MDAS) with a Buy. Price target $20.

Auriga analyst says, "MDAS’ solutions tackle two of the major challenges facing hospitals - increasing revenue and minimizing cost outlays. Perhaps more true today than ever, hospitals running at paper-thin margins must employ revenue cycle strategies to capture charges and manage collections, while rationalizing their supply spend which consumes as much as 30% of hospitals’ expenses. MDAS employs a largely recurring (85-90%) revenue model based on long-term contracts and subscriptions, and operates the third largest healthcare Group Purchasing Organization (GPO). Its 30%+ EBITDA margins are among the most impressive in the health care IT sector. In an environment in which reimbursement is declining and capital is constrained, MDAS’ value proposition has never been so timely. The Company is seeing a 2.5x increase in its sales funnel relative to one year ago and signing increasingly larger transformational deals."

To see more analyst ratings on MDAS Click Here.

MedAssets, Inc. provides technology-enabled products and services, which together deliver solutions designed to improve operating margin and cash flow for hospitals and health systems.

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