Evercore ISI Starts R1 RCM Inc (RCM) at Outperform, Added to Best SMiD Core Idea List

Evercore ISI analyst Elizabeth Anderson initiates coverage on R1 RCM Inc (NASDAQ: RCM) with a Outperform rating and a price target of $25.00.

The analyst comments "Amid a broad shellacking of healthcare IT stocks this year, R1 RCM differentiates itself from the broader sector’s morass. R1 is a core and much-needed product that improves hospitals’ financials with visible revenue growth linked to net patient revenue. The strength of R1’s business model along with the potential for additional numbers upside from Cloudmed synergies and additional new client wins make R1 our Top Pick in Healthcare IT (+ adding to Best SMID Core Ideas List). Thesis: R1 RCM has >90% recurring revenue, growing at a LDD+ organic CAGR through strong end market growth (MSD for medium term +) as well as share gains (outgrowing competition) and Cloudmed synergies. Margins to benefit by ~500 bps over the medium term as previously won contracts ramp (>40% of total end-to-end NPR) into maturity, providing real (and rare) high 20%+ margins (and FCF). Given this profile, we see current valuation as compelling, even with our Street-low $25 PT (~17X ’23 EBITDA; >45% upside)."

For an analyst ratings summary and ratings history on R1 RCM Inc click here. For more ratings news on R1 RCM Inc click here.

Shares of R1 RCM Inc closed at $16.72 yesterday.

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