Mednax, Inc. ( MD Quick Quote MD - Free Report) recently teamed up with Houston-based NightLight Pediatric Urgent Care in a bid to offer enhanced pediatric services to patients in specific markets across the United States. The transaction, being an all-cash one, is likely to be immediately accretive to the company’s earnings.
Through the latest move, Mednax intends to redefine the future of pediatric care delivery by pursuing a ‘total’ care model aimed at offering urgent/acute care, primary care and telehealth services. In addition to the traditional pediatric services offered to patients, the new model strives to improve pediatric health by intensifying focus on subspecialty services, primary care services, developmental pediatrics for infants and complementary prenatal services. The model also aims to address wellness, behavioral health and chronic pediatric diseases.
In fact, NightLight seems to be a suitable partner for complementing Mednax’s endeavors to offer improved pediatric care. The reason seems quite obvious as NightLight, which is a private eight-clinic practice, has been working closely with community pediatricians to address a wide range of minor non-emergent health issues for 14 years across the greater Houston area.
The latest deal seems to be a win-win situation for both Mednax and NightLight. On one hand, the Pediatrix unit of Mednax, which has evolved from a single neonatology practice to a multi-specialty medical group equipped to offer a full continuum of women and children care services, will be able to offer enhanced and cost-effective care resulting in improved health outcomes backed by the recent move. Having areas of operations across Houston, the partnership with NightLight is also likely to bolster the presence of Pediatrix in Texas. On the other hand, joining forces with Mednax is likely to broaden the scope of the NightLight platform by extending its service offerings to pediatric health and wellness care.
It has to be noted that telehealth services, which is part of the recent move, seems to be the need of the hour. Amid the COVID-19 pandemic induced stringent social-distancing measures worldwide, people were compelled to adopt telehealth visits as the only feasible option to seek medical help. This led to an uptick in demand for remote medical services amid the crisis and the trend is likely to sustain in the days ahead. Evidently, the global telehealth market is projected to witness a CAGR of 37.7% over the 2020-2025 period per Research and Markets.
Shares of Mednax have soared 244.6% in a year compared with the
industry’s rally of 186.2%.
Furthermore, the company has been divesting its non-performing businesses for intensifying focus on its core pediatrics and obstetrics operations. Its sale of MEDNAX Radiology Solutions last year bears testament to the same. Mednax has also divested American Anesthesiology last year in a bid to mitigate cash losses induced by the coronavirus outbreak.
Notably, Mednax has a Zacks Rank #4 (Sell).
Stocks to Consider
Some better-ranked stocks in the same space include
Community Health Systems, Inc. ( CYH Quick Quote CYH - Free Report) , Tenet Healthcare Corporation ( THC Quick Quote THC - Free Report) and HCA Healthcare, Inc. ( HCA Quick Quote HCA - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see . the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
Community Health, Tenet Healthcare and HCA Healthcare have a trailing four-quarter earnings surprise of 120.75%, 199.09% and 58.50%, on average, respectively.
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