Quipt Home Medical Corp. (QIPT) PT Lowered to $8 at Canaccord Genuity

Canaccord Genuity analyst Richard Close lowered the price target on Quipt Home Medical Corp. (NASDAQ: QIPT) to $8.00 (from $9.00) while maintaining a Buy rating.

The analyst commented: "While we are disappointed with the revenue performance in 2QFY'24 of 10.0% growth versus our 14.7% estimate, we were encouraged with the steady adj- EBITDA margin performance of 23.3% and almost in line with our 23.5% estimate, especially in the face of several revenue headwinds. The headwinds encountered are not necessarily
demand driven, thus we give Quipt some leeway on the lower than expected results. Specifically, the 75/25 reimbursement rate was not extended during the budget process and thus was a drag on revenue, which is expected to continue through the remainder of the year. Also, the move of Humana to capitated arrangements with AdaptHealth and Rotech led to shifting of members and business away from Quipt which unfortunately showed up in 2Q. This impact may have been masked in 1Q due to very strong resupply. Finally, there was likely some impact related to Change on the top-line and definitely on cash collections and cash flow that should normalize over the coming quarters. Not the cleanest quarter, but margin execution was solid despite items largely out of management's control. The valuation remains attractive, although we do expect organic growth likely will come in below the 8-10% internal target. We expect Quipt to manage through these headwinds and continue to believe that shares offer value at roughly 4x CY'24 adj-EBITDA."

You May Also Be Interested In

• Fiserv (FISV) PT Lowered to $60 at Freedom Broker
• Solar Industries (SOIL:IN) PT Raised to INR23,500 at ICICI Securities
• Freedom Broker Upgrades Serve Robotics (SERV) to Buy