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Here's Why Hold Strategy is Apt for The Joint (JYNT) Stock Now
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The Joint Corp. (JYNT - Free Report) is well-poised to grow on the back of its growing geographical footprint and patient visits. The pent-up demand for the company’s services, which were paused due to pandemic-related constraints, especially among seniors, will likely boost footfall in its clinics in the coming days.
The Joint — with a market cap of $198.5 million — is a chiropractic care provider and the largest operator and franchisor of chiropractic clinics in the country. Courtesy of solid prospects, this currently Zacks Rank #3 (Hold) stock is worth retaining in your portfolio at the moment.
Let’s delve deeper.
The Joint’s growing footprint in the country will likely enhance its margin contribution in the franchisee business. This year, JYNT intends to open 100-120 new franchised clinics compared with 121 opened in 2022. Also, the company predicts opening 8-12 new greenfield clinics in 2023 compared with the year-ago level of 16 clinics.
At the first-quarter end, The Joint was present in 870 locations in the country, with 740 franchised clinics and the rest as corporate clinics. It recently acquired regional developer rights for the Wisconsin region for $950,000. Such moves are likely to keep enhancing the company’s reach, which will help in increasing patient visits to its clinics.
Annually, the company witnesses around 12 million patient visits, which is likely to further grow in the coming days, leading to significant growth in the top line. The Zacks Consensus Estimate for current-year revenues stands at $121.6 million, suggesting a 19.3% rise from the prior-year reported number. Further, the consensus mark for 2024 revenues indicates 12.2% year-over-year growth.
Rising revenues and gradual normalization of the labor market will help the company to boost its profits. For 2023, JYNT expects adjusted EBITDA to grow to $12.5-$14 million from $11.5 million a year ago. The Zacks Consensus Estimate for JYNT’s current-year earnings is pegged at 30 cents per share, indicating significant growth from 8 cents a year ago.
The stock has witnessed two upward estimate revisions in the past 60 days against none in the opposite direction. The company beat earnings estimates twice in the past four quarters and missed on the other two occasions, with the average surprise being 255.7%. This is depicted in the graph below.
The company’s cash flow situation is rapidly improving. Over the trailing 12-month period, JYNT’s net cash from operations rose 50.3% to $17 million, reflecting growing strength in operations. This will make future expansionary moves easy for the company.
Key Risks
However, there are a few factors that are likely to hinder the stock’s growth.
The Joint’s return on equity of 11.4% is significantly lower than the industry average of 24.8%, indicating inefficiency in fund usage.
Also, JYNT’s 12-month forward price-to-earnings multiple of 49.2X is much higher than 16.5X of the industry, making it a little expensive at the current level. Nevertheless, we believe that a systematic and strategic plan of action will drive JYNT’s growth in the long term.
The Zacks Consensus Estimate for Humana’s 2023 earnings indicates a 12% year-over-year increase. Humana beat earnings estimates in all the last four quarters, with the average being 8.9%.
The Zacks Consensus Estimate for Apyx Medical’s 2023 earnings indicates a 38.8% improvement from the year-ago reported figure. The consensus estimate for APYX’s 2023 revenues indicates 37.3% year-over-year growth.
The Zacks Consensus Estimate for Boston Scientific’s 2023 bottom line suggests a 14% increase from the prior-year levels. BSX has witnessed 12 upward estimate revisions in the past 60 days against none in the opposite direction.
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Here's Why Hold Strategy is Apt for The Joint (JYNT) Stock Now
The Joint Corp. (JYNT - Free Report) is well-poised to grow on the back of its growing geographical footprint and patient visits. The pent-up demand for the company’s services, which were paused due to pandemic-related constraints, especially among seniors, will likely boost footfall in its clinics in the coming days.
The Joint — with a market cap of $198.5 million — is a chiropractic care provider and the largest operator and franchisor of chiropractic clinics in the country. Courtesy of solid prospects, this currently Zacks Rank #3 (Hold) stock is worth retaining in your portfolio at the moment.
Let’s delve deeper.
The Joint’s growing footprint in the country will likely enhance its margin contribution in the franchisee business. This year, JYNT intends to open 100-120 new franchised clinics compared with 121 opened in 2022. Also, the company predicts opening 8-12 new greenfield clinics in 2023 compared with the year-ago level of 16 clinics.
At the first-quarter end, The Joint was present in 870 locations in the country, with 740 franchised clinics and the rest as corporate clinics. It recently acquired regional developer rights for the Wisconsin region for $950,000. Such moves are likely to keep enhancing the company’s reach, which will help in increasing patient visits to its clinics.
Annually, the company witnesses around 12 million patient visits, which is likely to further grow in the coming days, leading to significant growth in the top line. The Zacks Consensus Estimate for current-year revenues stands at $121.6 million, suggesting a 19.3% rise from the prior-year reported number. Further, the consensus mark for 2024 revenues indicates 12.2% year-over-year growth.
Rising revenues and gradual normalization of the labor market will help the company to boost its profits. For 2023, JYNT expects adjusted EBITDA to grow to $12.5-$14 million from $11.5 million a year ago. The Zacks Consensus Estimate for JYNT’s current-year earnings is pegged at 30 cents per share, indicating significant growth from 8 cents a year ago.
The stock has witnessed two upward estimate revisions in the past 60 days against none in the opposite direction. The company beat earnings estimates twice in the past four quarters and missed on the other two occasions, with the average surprise being 255.7%. This is depicted in the graph below.
The Joint Corp. Price and EPS Surprise
The Joint Corp. price-eps-surprise | The Joint Corp. Quote
The company’s cash flow situation is rapidly improving. Over the trailing 12-month period, JYNT’s net cash from operations rose 50.3% to $17 million, reflecting growing strength in operations. This will make future expansionary moves easy for the company.
Key Risks
However, there are a few factors that are likely to hinder the stock’s growth.
The Joint’s return on equity of 11.4% is significantly lower than the industry average of 24.8%, indicating inefficiency in fund usage.
Also, JYNT’s 12-month forward price-to-earnings multiple of 49.2X is much higher than 16.5X of the industry, making it a little expensive at the current level. Nevertheless, we believe that a systematic and strategic plan of action will drive JYNT’s growth in the long term.
Key picks
Some better-ranked stocks in the broader medical space are Humana Inc. (HUM - Free Report) , Apyx Medical Corporation (APYX - Free Report) and Boston Scientific Corporation (BSX - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Humana’s 2023 earnings indicates a 12% year-over-year increase. Humana beat earnings estimates in all the last four quarters, with the average being 8.9%.
The Zacks Consensus Estimate for Apyx Medical’s 2023 earnings indicates a 38.8% improvement from the year-ago reported figure. The consensus estimate for APYX’s 2023 revenues indicates 37.3% year-over-year growth.
The Zacks Consensus Estimate for Boston Scientific’s 2023 bottom line suggests a 14% increase from the prior-year levels. BSX has witnessed 12 upward estimate revisions in the past 60 days against none in the opposite direction.