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LifePoint Health (LPNT) Up 4.3% Since Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for LifePoint Health, Inc. . Shares have added about 4.3% in that time frame.

Will the recent positive trend continue leading up to its next earnings release, or is LPNT due for a pullback? 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 catalysts.

LifePoint Health Q1 Earnings Beat, Revenues Miss

LifePoint Health, Inc. reported earnings of $1.22 per share in first-quarter 2018, beating the Zacks Consensus Estimate by 10.9%. Also, the figure increased 14% year over year.

Operational Update

Revenues of $1.6 billion missed the Zacks Consensus Estimate by 0.7% and declined 1.7% year over year.

Same-hospital revenues increased 0.4% year over year to $1.6 billion. This increase was led by a 2.6% rise in same-hospital revenues per equivalent admission, partially offset by a 2.2% decrease in same-hospital equivalent admissions.

Adjusted EBITDA for the quarter ended Mar 31, 2018, was $188.5 million, down 3.6% year over year.

Equivalent admissions declined 4.7% year over year to 171,272 and revenue per equivalent admission was up 3% year over year to $9,358.

Total expenses of $1.61 billion increased 4.6% year over year, led by higher other operating expenses.

At the end of the first quarter, the company had 71 hospitals compared with 72 hospitals in the year-ago quarter.

Margins for the quarter were 11.8%, up 20 basis points sequentially. The margin expansion includes improvements in the class of 2016 hospitals and benefits from additional cost management initiatives.

Financial Update

As of Mar 31, 2018, the company had total assets of $6.26 billion, down 0.5% year over year.

Cash and cash equivalents totaled $140 million, up 25% year over year.

As of Mar 31, 2018, long-term debt increased 0.6% to $2.89 billion from year-end 2016.

Net cash provided by operating activities totaled $100.6 million, up 9.7% year over year, led by decreases in the amount and timing of payments for self-insurance claims and taxes. These improvements were partially offset by increases in the amount and timing of payments for accounts payable and accrued salaries.

The company invested $56.2 million in capital expenditures during the  first quarter with its full year expected spend ranges from $475 million to $500 million.

Share Repurchase Update

The company repurchased 625,000 shares of its common stock for $30 million in the first quarter.

Business Update

During the reported quarter, the company entered into an agreement to sell the three hospitals in the State of Louisiana — Mercy Regional Medical Center in Ville Platte, Acadian Medical Center, a campus of Mercy Regional in Eunice, and Minden Medical Center in Minden, LA
 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. There have been five revisions higher for the current quarter compared to three lower.

LifePoint Health, Inc. Price and Consensus

VGM Scores

At this time, LPNT has a strong Growth Score of A, though it is lagging a bit on the momentum front with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Based on our scores, the stock is more suitable for value and growth investors than momentum investors.

Outlook

Estimates have been broadly trending upward for the stock and the magnitude of these revisions looks promising. Notably, LPNT has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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