ModivCare (MODV) Investor Day Highlights Valuation and Cross Selling Opportunities - Jefferies

Jefferies analyst Brian Tanquilut reiterated a Buy rating and $150.00 price target on ModivCare (NASDAQ: MODV) after attending the company's investor day and walking away positive on the near term and longer term outlooks. Key takeaways include:
1) Cohesion between acquired assets is clear
2) enhanced NEMT outlook demonstrates success of cost savings programs
3) robust cross-selling, bundling, and value-based contracting opportunities should drive growth upside
4) valuation is compelling given growth outlook & $300MM 2025 EBITDA target

The analyst stated "Robust Cross-Selling Opportunity Should Drive Growth Upside as MODV Moves Towards Value-Based Contracts & Bundles. While fundamentals remain solid across all of MODV's business lines, mgmt highlighted incremental opportunities to drive growth by crossselling offerings into existing clients, particularly around their nationally-scaled NEMT business. We found (1) mgmt's estimated $800MM revenue opportunity across all services with just one national Medicaid plan, (2) the robust earnings growth potential of layering high margin RPM business (230k avg. members monitored in 1Q22) over their existing ~30MM member NEMT base, and (3) the mid-to-long term opportunity to shift contracts to capitated bundles or other value-based arrangements as particularly compelling points."

For an analyst ratings summary and ratings history on ModivCare click here. For more ratings news on ModivCare click here.

Shares of ModivCare closed at $84.62 yesterday.

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