A month has gone by since the last earnings report for LHC Group . Shares have lost about 15.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is LHC due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
LHC Group Q3 Earnings Match Estimates, Down Y/Y
LHC Group, Inc. reported third-quarter 2021 adjusted earnings per share of $1.45, which matched the Zacks Consensus Estimate. The bottom line declined 11% year over year.
GAAP earnings per share was 88 cents in the quarter under review, up 91.3% on a year-over-year basis.
Revenue Details
The company reported net service revenues of $565.5 million in the quarter, which beat the Zacks Consensus Estimate by 0.03%. The top line improved 6.6% on a year-over-year basis.
Q3 Highlights
In the quarter under review, total organic growth in home health admissions rose 3.6% year over year, while organic growth in hospice admissions inched up 0.1%.
Home health service revenues were $386.7 million, up 3.5% year over year. Meanwhile, hospice services revenues amounted to $82.7 million, up 38.2%.
Business Update
Presently, LHC Group estimates $300 million of acquired revenues in 2021.
On a year-to-date basis, the company has completed a buyout of around $300 million in annualized revenues. The company’s mergers and acquisitions activity brought its national footprint to 917 locations in 37 states and the District of Columbia.
Margin Analysis
Gross profit in the quarter totaled $221.6 million, down 1.7%. Gross margin in the reported quarter was 39.2%, which contracted 330 basis points (bps) on a year-over-year basis.
Operating profit was $45.1 million, up 131.3% from the prior-year quarter. Operating margin was 7.9%, up 420 bps.
Financial Position
LHC Group exited the third quarter with cash amounting to $29.5 million, down from $112.1 million sequentially.
Cumulative net cash used in operating activities at the end of the third quarter totaled $51.6 million, against net cash provided in operating activities of $455.7 million.
2021 Guidance
LHC Group raised 2021 revenue outlook (representing the completion of the buyout of home health, hospice, and therapy assets from the HCA Healthcare and Brookdale Healthcare Services Venture on Nov 1, 2021) and now anticipates net service revenues between $2.215 billion and $2.220 billion (up from the previously guided range of $2.200-$2.205 billion). The Zacks Consensus Estimate for the same is pegged at $2.21 billion.
The company continues to project adjusted earnings per share to be $5.75-$5.85. The consensus mark for the same stands at $5.78 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted -13.68% due to these changes.
VGM Scores
Currently, LHC has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Following the exact same course, 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 F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise LHC has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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LHC (LHCG) Down 15.2% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for LHC Group . Shares have lost about 15.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is LHC due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
LHC Group Q3 Earnings Match Estimates, Down Y/Y
LHC Group, Inc. reported third-quarter 2021 adjusted earnings per share of $1.45, which matched the Zacks Consensus Estimate. The bottom line declined 11% year over year.
GAAP earnings per share was 88 cents in the quarter under review, up 91.3% on a year-over-year basis.
Revenue Details
The company reported net service revenues of $565.5 million in the quarter, which beat the Zacks Consensus Estimate by 0.03%. The top line improved 6.6% on a year-over-year basis.
Q3 Highlights
In the quarter under review, total organic growth in home health admissions rose 3.6% year over year, while organic growth in hospice admissions inched up 0.1%.
Home health service revenues were $386.7 million, up 3.5% year over year. Meanwhile, hospice services revenues amounted to $82.7 million, up 38.2%.
Business Update
Presently, LHC Group estimates $300 million of acquired revenues in 2021.
On a year-to-date basis, the company has completed a buyout of around $300 million in annualized revenues. The company’s mergers and acquisitions activity brought its national footprint to 917 locations in 37 states and the District of Columbia.
Margin Analysis
Gross profit in the quarter totaled $221.6 million, down 1.7%. Gross margin in the reported quarter was 39.2%, which contracted 330 basis points (bps) on a year-over-year basis.
Operating profit was $45.1 million, up 131.3% from the prior-year quarter. Operating margin was 7.9%, up 420 bps.
Financial Position
LHC Group exited the third quarter with cash amounting to $29.5 million, down from $112.1 million sequentially.
Cumulative net cash used in operating activities at the end of the third quarter totaled $51.6 million, against net cash provided in operating activities of $455.7 million.
2021 Guidance
LHC Group raised 2021 revenue outlook (representing the completion of the buyout of home health, hospice, and therapy assets from the HCA Healthcare and Brookdale Healthcare Services Venture on Nov 1, 2021) and now anticipates net service revenues between $2.215 billion and $2.220 billion (up from the previously guided range of $2.200-$2.205 billion). The Zacks Consensus Estimate for the same is pegged at $2.21 billion.
The company continues to project adjusted earnings per share to be $5.75-$5.85. The consensus mark for the same stands at $5.78 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted -13.68% due to these changes.
VGM Scores
Currently, LHC has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Following the exact same course, 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 F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise LHC has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.