Leerink Partners Remain Bullish on TeamHealth Holdings (TMH) Following 2Q15 Results
Leerink Partners reiterated an Outperform rating and $80.00 price target on Team Health (NYSE: TMH) following 2Q15 report. Net revenue at $878MM beat consensus at $833B. Adjusted EPS at $0.70 beat consensus by 1.4%.
Analyst Ana Gupte commented, "TMH (OP) reported 2Q15 earnings today before market open. Net revenue beat consensus by 5.5% driven acquisitions and new contracts exhibiting sequential and YoY improvement partially offset by slowdown in contribution from same contracts. Same contract revenue contributed 4.4% to the overall 30% revenue growth with volumes growing by 6.1% aided by Exchanges driven ED admissions. Lower acuity and $7.6MM YoY reduction in same contract Medicaid Parity revenue resulted in a unit pricing growth slowing down to be flat in 2Q15. While acquired contracts contributed a solid 20.5% to the revenue growth, the contribution of new contracts at 5.1% exceeded the normal range of 3-4%. Driven by revenue beat, adj. EBITDA at $99.4MM beat consensus by 4.6%. Management raised its 2015 mean revenue guidance by ~$140MM while EBITDA margin guidance was kept at 10.5-11% implying a ~$16MM increase in absolute EBITDA. TMH also agreed to acquire IPC Healthcare, a leading national acute hospitalist and post-acute provider organization, for $1.6B in an all-cash deal to create a leading physician services organization. We expect investors to view this beat and raise 2Q and IPC acquisition news positively. We are puzzled about the TMH stock weakness and expect that over time investors will come to appreciate the strategic value of the deal."
For an analyst ratings summary and ratings history on Team Health click here. For more ratings news on Team Health click here.
Shares of Team Health closed at $64.68 yesterday.