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Analyst Blog

WebMD Health Corp. (WBMD - Free Report) announced that it has commenced a tender offer to purchase up to 2 million shares of its common stock. The tender offer will expire on Thursday, Dec 15, 2016. At the end of the last reported quarter, WebMD had approximately $1.065 billion in cash and investments. The company will use a portion of its cash and investments to fund the tender offer.

Going forward, we believe that the focus of the company on acquiring new clients will help WebMD Health gain better market traction, which will lead to increased business. It has been a story of constant achievements for the company which provides advertising and sponsorship solutions to targeted demographics and licenses private portal services to employers and health plans.

Based in New York, NY, WebMD Health is a leading provider of health information services, serving consumers, physicians, healthcare professionals, employers, and health plans through public and private online portals, mobile platforms and health-focused publications.

We believe the company is well positioned to capitalize on growth and major changes that are currently affecting the healthcare industry. We also believe that the recent changes in Capitol Hill would make the company’s core areas of expertise i.e. the online audience of healthcare consumers and physicians in the U.S. health information market space more geared toward growth.

However, the company’s top line is heavily dependent on the advertising and sponsorship budgets of brands at pharmaceutical manufacturers. This we believe is a major overhang on the company. Other major areas of concern for the company include drug patent expiration, increased formulary restrictions on high-priced launches, and restrictions on drug promotion to physicians and consumers.

WEBMD HEALTH CP Price

 

Zacks Rank & Key Picks

Currently, WebMD Health has a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader medical space include Cogentix Medical, Inc. (CGNT - Free Report) , CryoLife Inc. (CRY - Free Report) and IDEXX Laboratories, Inc. (IDXX - Free Report) . Notably, IDEXX Laboratories and Cogentix sport a Zacks Rank #1 (Strong Buy) while CryoLife has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cogentix Medical registered a positive earnings surprise of 100% in the last reported quarter. Notably, the company has a solid one-year return of roughly 73.7%.

CryoLife has a stellar one-year return of roughly 90.7%. In the last reported quarter, the company registered an impressive earnings surprise of 225%.

IDEXX Laboratories represents a solid one-year return of almost 67.8%. The company has a long-term expected growth rate of almost 14.96%.

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