It has been about a month since the last earnings report for Change Healthcare . Shares have added about 12.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Change Healthcare due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Change Healthcare Q2 Earnings & Revenues Top Estimates
Change Healthcare Inc. reported second-quarter fiscal 2021 adjusted earnings per share of 32 cents, which beat the Zacks Consensus Estimate by 28%. The bottom line also improved 18.5% year over year.
Revenue Details
Revenues declined 5% from the prior-year period to $755.9 million in the reported quarter. However, the top line surpassed the Zacks Consensus Estimate by 2%.
Segmental Analysis
Change Healthcare operates through three segments — Software and Analytics, Network Solutions, Technology-Enabled Services and Postage and Eliminations.
Software and Analytics
Revenues at this segment totaled $354.9 million, down 4.9% on a year-over-year basis.
Network Solutions
Revenues at this segment were $184.1 million, up 27.6% year over year.
Technology-Enabled Services
Revenues at this segment came in at $231.8 million, down 6.3% year over year.
Postage and Eliminations
Revenues at this segment came in at $24.1 million, down 22.9% year over year.
Margin Analysis
Total operating expenses were $752.6 million, up 5.9% from the prior-year quarter.
In the quarter under review, Change Healthcare reported operating income of $3.3 million, which soared 96.1% from the year-ago quarter.
Financial Position
The company exited the quarter with cash and cash equivalents of $167.5 million compared with $178.4 million in the preceding quarter.
Cumulative cash provided operating activities at the end of second-quarter fiscal 2021 amounted to $296.6 million compared with cash flow from operating activities of $223.9 million in the year-ago period.
Guidance
Due to uncertainty surrounding the COVID-19 pandemic, Change Healthcare has only issued quarterly guidance.
For third-quarter fiscal 2021, the company projects Solutions revenues between $725 million and $745 million.
Adjusted EPS is estimated between 28 cents and 33 cents. The Zacks Consensus Estimate for the same stands at 29 cents.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
At this time, Change Healthcare has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Change Healthcare has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Change Healthcare (CHNG) Up 12.9% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Change Healthcare . Shares have added about 12.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Change Healthcare due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Change Healthcare Q2 Earnings & Revenues Top Estimates
Change Healthcare Inc. reported second-quarter fiscal 2021 adjusted earnings per share of 32 cents, which beat the Zacks Consensus Estimate by 28%. The bottom line also improved 18.5% year over year.
Revenue Details
Revenues declined 5% from the prior-year period to $755.9 million in the reported quarter. However, the top line surpassed the Zacks Consensus Estimate by 2%.
Segmental Analysis
Change Healthcare operates through three segments — Software and Analytics, Network Solutions, Technology-Enabled Services and Postage and Eliminations.
Software and Analytics
Revenues at this segment totaled $354.9 million, down 4.9% on a year-over-year basis.
Network Solutions
Revenues at this segment were $184.1 million, up 27.6% year over year.
Technology-Enabled Services
Revenues at this segment came in at $231.8 million, down 6.3% year over year.
Postage and Eliminations
Revenues at this segment came in at $24.1 million, down 22.9% year over year.
Margin Analysis
Total operating expenses were $752.6 million, up 5.9% from the prior-year quarter.
In the quarter under review, Change Healthcare reported operating income of $3.3 million, which soared 96.1% from the year-ago quarter.
Financial Position
The company exited the quarter with cash and cash equivalents of $167.5 million compared with $178.4 million in the preceding quarter.
Cumulative cash provided operating activities at the end of second-quarter fiscal 2021 amounted to $296.6 million compared with cash flow from operating activities of $223.9 million in the year-ago period.
Guidance
Due to uncertainty surrounding the COVID-19 pandemic, Change Healthcare has only issued quarterly guidance.
For third-quarter fiscal 2021, the company projects Solutions revenues between $725 million and $745 million.
Adjusted EPS is estimated between 28 cents and 33 cents. The Zacks Consensus Estimate for the same stands at 29 cents.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
At this time, Change Healthcare has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Change Healthcare has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.