It has been about a month since the last earnings report for LHC Group . Shares have lost about 2.3% 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 its most recent earnings report in order to get a better handle on the important catalysts.
LHC Group Q2 Earnings Beat Estimates, Revenues Lag
LHC Group, Inc. reported second-quarter 2021 adjusted earnings per share of $1.62, which surpassed the Zacks Consensus Estimate of $1.55 by 4.5%. The bottom line improved 31.7% year over year.
GAAP earnings per share was $1.23 in the quarter under review, down 16.1% on a year-over-year basis.
Revenue Details
The company reported net service revenues of $545.9 million in the quarter, which missed the Zacks Consensus Estimate by 1%. However, the top line improved 12% on a year-over-year basis.
Q2 Highlights
In the quarter under review, total organic growth in home health admissions rose 16.4% year over year, while organic growth in hospice admissions climbed 11%.
However, home health service revenues were $396.5 million, up 16.7% year over year. Meanwhile, hospice services revenues amounted to $63.8 million, up 4.5%.
Business Update
Presently, LHC Group's acquisition pipeline stands at above $400 million with over $300 million of the targets in exclusive discussions, thereby indicating the company’s confidence to raise its target to a range of $350-$500 million in acquired revenues in 2021 (up from the prior range of $150 million to $200 million).
On a year-to-date basis, the company has completed or announced the buyout of 26 hospice locations, three home health locations and one Home and Community Based Services (HCBS) location in 11 states, thereby demonstrating annualized revenues of $161.7 million.
Margin Analysis
Gross profit in the quarter totaled $228 million, up 26.3%. Gross margin in the reported quarter was 41.8%, which expanded 470 basis points (bps) on a year-over-year basis.
Operating profit was $60.2 million, down 18.5% from the prior-year quarter. Operating margin was 11%, down 420 bps.
Financial Position
LHC Group exited the second quarter with cash amounting to $112.1 million, down from $292.3 million sequentially.
Cumulative net cash used in operating activities at the end of the second quarter totaled $11.8 million, against net cash provided in operating activities of $435.9 million.
2021 Guidance
LHC Group raised 2021 earnings outlook and now projects adjusted earnings per share to be $6.30-$6.50 (up from the prior guided range of $6.20-$6.40). The consensus mark for the same stands at $6.36 per share.
For full-year 2021, the company affirmed its net service revenues between $2.22 billion and $2.27 billion. The Zacks Consensus Estimate for the same is pegged at $2.25 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
VGM Scores
Currently, LHC has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% 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.
Outlook
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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Why Is LHC (LHCG) Down 2.3% Since Last Earnings Report?
It has been about a month since the last earnings report for LHC Group . Shares have lost about 2.3% 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 its most recent earnings report in order to get a better handle on the important catalysts.
LHC Group Q2 Earnings Beat Estimates, Revenues Lag
LHC Group, Inc. reported second-quarter 2021 adjusted earnings per share of $1.62, which surpassed the Zacks Consensus Estimate of $1.55 by 4.5%. The bottom line improved 31.7% year over year.
GAAP earnings per share was $1.23 in the quarter under review, down 16.1% on a year-over-year basis.
Revenue Details
The company reported net service revenues of $545.9 million in the quarter, which missed the Zacks Consensus Estimate by 1%. However, the top line improved 12% on a year-over-year basis.
Q2 Highlights
In the quarter under review, total organic growth in home health admissions rose 16.4% year over year, while organic growth in hospice admissions climbed 11%.
However, home health service revenues were $396.5 million, up 16.7% year over year. Meanwhile, hospice services revenues amounted to $63.8 million, up 4.5%.
Business Update
Presently, LHC Group's acquisition pipeline stands at above $400 million with over $300 million of the targets in exclusive discussions, thereby indicating the company’s confidence to raise its target to a range of $350-$500 million in acquired revenues in 2021 (up from the prior range of $150 million to $200 million).
On a year-to-date basis, the company has completed or announced the buyout of 26 hospice locations, three home health locations and one Home and Community Based Services (HCBS) location in 11 states, thereby demonstrating annualized revenues of $161.7 million.
Margin Analysis
Gross profit in the quarter totaled $228 million, up 26.3%. Gross margin in the reported quarter was 41.8%, which expanded 470 basis points (bps) on a year-over-year basis.
Operating profit was $60.2 million, down 18.5% from the prior-year quarter. Operating margin was 11%, down 420 bps.
Financial Position
LHC Group exited the second quarter with cash amounting to $112.1 million, down from $292.3 million sequentially.
Cumulative net cash used in operating activities at the end of the second quarter totaled $11.8 million, against net cash provided in operating activities of $435.9 million.
2021 Guidance
LHC Group raised 2021 earnings outlook and now projects adjusted earnings per share to be $6.30-$6.50 (up from the prior guided range of $6.20-$6.40). The consensus mark for the same stands at $6.36 per share.
For full-year 2021, the company affirmed its net service revenues between $2.22 billion and $2.27 billion. The Zacks Consensus Estimate for the same is pegged at $2.25 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
VGM Scores
Currently, LHC has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% 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.
Outlook
LHC has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.