A month has gone by since the last earnings report for LHC Group . Shares have lost about 3.6% 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 Q1 Earnings Beat Estimates, Revenues Miss
LHC Group, Inc. reported first-quarter 2021 adjusted earnings per share of $1.39, which surpassed the Zacks Consensus Estimate of $1.26 by 10.3%. Moreover, the bottom line improved 85.3% year over year.
Revenue Details
The company reported net service revenues of $524.8 million in the quarter, which missed the Zacks Consensus Estimate by 0.02%. Nonetheless, the top line improved 2.3% on a year-over-year basis.
Q1 Highlights
In the quarter under review, total organic growth in home health admissions declined 0.4% year over year, while organic growth in hospice admissions climbed 7.6%.
However, home health service revenues were $373.8 million, up 1.6% year over year. Meanwhile, hospice services revenues amounted to $62.7 million, up 3.6%.
Business Update
Presently, LHC Group's acquisition pipeline stands at above $502 million with over $300 million of the targets in exclusive discussions, thereby indicating the company’s confidence in achieving or exceeding its target of $150 million to $200 million in acquired revenues in 2021.
Margin Analysis
Gross profit in the quarter totaled $214.6 million, up 11.9%. Gross margin in the reported quarter was 40.9%, which expanded 350 basis points (bps) on a year-over-year basis.
Operating profit was $51.1 million, up 51.3% from the prior-year quarter. Operating margin was 9.7%, up 310 bps.
Financial Position
LHC Group exited the first quarter with cash amounting to $292.3 million, compared with $286.6 million sequentially.
Net cash provided by operating activities at the end of the first quarter totaled $44.8 million, compared to net cash used in operating activities of $24.5 million.
2021 Guidance Raised
LHC Group raised its 2021 outlook to take into consideration the extension of the Public Health Emergency to Jul 20, 2021 as well as the suspension of Medicare sequestration to Dec 31, 2021.
For full-year 2021, the company now projects net service revenues between $2.22 billion and $2.27 billion (up from the previously guided range of $2.2-$2.26 billion). The Zacks Consensus Estimate for the same is pegged at $2.22 billion.
Adjusted earnings per share is projected to be $6.20-$6.40 (up from the prior guided range of $5.65-$5.90). The consensus mark for the same stands at $6.01 per share.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 7.21% due to these changes.
VGM Scores
At this time, LHC has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, LHC has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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LHC (LHCG) Down 3.6% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for LHC Group . Shares have lost about 3.6% 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 Q1 Earnings Beat Estimates, Revenues Miss
LHC Group, Inc. reported first-quarter 2021 adjusted earnings per share of $1.39, which surpassed the Zacks Consensus Estimate of $1.26 by 10.3%. Moreover, the bottom line improved 85.3% year over year.
Revenue Details
The company reported net service revenues of $524.8 million in the quarter, which missed the Zacks Consensus Estimate by 0.02%. Nonetheless, the top line improved 2.3% on a year-over-year basis.
Q1 Highlights
In the quarter under review, total organic growth in home health admissions declined 0.4% year over year, while organic growth in hospice admissions climbed 7.6%.
However, home health service revenues were $373.8 million, up 1.6% year over year. Meanwhile, hospice services revenues amounted to $62.7 million, up 3.6%.
Business Update
Presently, LHC Group's acquisition pipeline stands at above $502 million with over $300 million of the targets in exclusive discussions, thereby indicating the company’s confidence in achieving or exceeding its target of $150 million to $200 million in acquired revenues in 2021.
Margin Analysis
Gross profit in the quarter totaled $214.6 million, up 11.9%. Gross margin in the reported quarter was 40.9%, which expanded 350 basis points (bps) on a year-over-year basis.
Operating profit was $51.1 million, up 51.3% from the prior-year quarter. Operating margin was 9.7%, up 310 bps.
Financial Position
LHC Group exited the first quarter with cash amounting to $292.3 million, compared with $286.6 million sequentially.
Net cash provided by operating activities at the end of the first quarter totaled $44.8 million, compared to net cash used in operating activities of $24.5 million.
2021 Guidance Raised
LHC Group raised its 2021 outlook to take into consideration the extension of the Public Health Emergency to Jul 20, 2021 as well as the suspension of Medicare sequestration to Dec 31, 2021.
For full-year 2021, the company now projects net service revenues between $2.22 billion and $2.27 billion (up from the previously guided range of $2.2-$2.26 billion). The Zacks Consensus Estimate for the same is pegged at $2.22 billion.
Adjusted earnings per share is projected to be $6.20-$6.40 (up from the prior guided range of $5.65-$5.90). The consensus mark for the same stands at $6.01 per share.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 7.21% due to these changes.
VGM Scores
At this time, LHC has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, LHC has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.