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Why Is Pediatrix Medical Group (MD) Up 9.5% Since Last Earnings Report?
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A month has gone by since the last earnings report for Pediatrix Medical Group (MD - Free Report) . Shares have added about 9.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Pediatrix Medical Group due for a pullback? 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.
Pediatrix Q2 Earnings Beat Estimates on Stable Volumes
Pediatrix reported second-quarter 2024 adjusted earnings per share (EPS) of 34 cents, which outpaced the Zacks Consensus Estimate by 9.7%. However, the bottom line declined 12.8% year over year.
Net revenues inched up 0.7% year over year to $504.3 million on the back of growth in same-unit revenues. The top line, however, missed the consensus mark of $506 million.
MD’s better-than-expected earnings benefited from stable patient volumes and improved hospital contract administrative fees. However, the upside was partly offset by an increased expense level resulting from rising practice salaries and benefits, and transformational and restructuring-related costs.
PediatrixMedical reported second-quarter 2024 adjusted earnings per share (EPS) of 34 cents, which outpaced the Zacks Consensus Estimate by 9.7%. However, the bottom line declined 12.8% year over year.
Net revenues inched up 0.7% year over year to $504.3 million on the back of growth in same-unit revenues. The top line, however, missed the consensus mark of $506 million.
Q2 Update
Overall, same-unit revenues increased 2.8% year over year. Same-unit revenues, attributable to patient volume, grew 0.4% year over year.
Same-unit revenues from net reimbursement-related factors inched up 2.4%, attributable to decent growth in hospital contract administrative fees and improved payor mix.
Pediatrix Medical’s total operating costs of $662 million increased 46.4% year over year, higher than our estimate of $470.1 million. The rise was due to higher practice salaries and benefits, practice supplies and other operating expenses, coupled with the incurrence of transformational and restructuring-related expenses and goodwill impairment, amongst others, in the second quarter.
Practice salaries and benefits increased 1.1% on a year-over-year basis. This is mainly due to rising same-unit clinical compensation costs, partially offset by the impact of practice dispositions. Meanwhile, practice supplies and other expenses witnessed an uptick of 4.1% year over year. Our estimate indicated the two expense components to increase 3.2% and 6.7%, respectively, on a year-over-year basis. General and administrative expenses declined 2.5% year over year in the second quarter against our estimate of a 0.6% rise.
Transformational and restructuring-related costs of $13.6 million stemmed from revenue cycle management transition activities and practice dispositions.
Interest expenses of $10.3 million declined 8% year over year and came higher than our estimate of $9.9 million.
Pediatrix incurred a net loss of $153 million against a net income of $28.3 million in the year-ago period.
Adjusted EBITDA fell 2.1% year over year to $57.9 million but beat our estimate of $51 million.
Financial Update (as of Jun 30, 2024)
Pediatrix exited the second quarter with cash and cash equivalents of $19.4 million compared with $73.3 million at 2023-end. There was no leftover capacity as part of its revolving credit facility at the quarter-end.
Total assets of $2 billion slipped 10% from the figure at 2023-end.
Total debt, including finance leases, net, amounted to $630.4 million, which declined 0.5% from the figure as of Dec 31, 2023.
Total shareholders’ equity of $706.5 million declined 16.8% from the 2023-end level.
Net cash used in operating activities was $18.3 million, while the cash usage totaled $11.9 million in the prior-year quarter.
Share Repurchase Update
Pediatrix bought back a nominal number of its common shares for $0.9 million in the first half of 2024. It had a leftover capacity of $3.7 million under its $500 million repurchase program (approved in August 2018) as of Jun 30, 2024.
2024 View Revised
Management continues to forecast adjusted EBITDA between $200 million and $220 million for 2024. The mid-point of the annual guidance indicates a 4.8% improvement from the 2023 reported figure.
Interest expense is estimated to be $40.02 million, indicating a 4.9% decline from the 2023 figure.
Depreciation and amortization expenses are estimated to be $37 million.
Transformational and restructuring-related expenses are expected at $40 million. Income tax expense is forecasted to be in the range of $2.58-$7.98 million.
Net loss is estimated to be between $112.51 million and $97.91 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 7.29% due to these changes.
VGM Scores
Currently, Pediatrix Medical Group has a great Growth Score of A, though it is lagging a bit on the Momentum Score 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 quintile 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
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Pediatrix Medical Group has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Pediatrix Medical Group belongs to the Zacks Medical Services industry. Another stock from the same industry, Avantor, Inc. (AVTR - Free Report) , has gained 3.1% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
Avantor reported revenues of $1.7 billion in the last reported quarter, representing a year-over-year change of -2.4%. EPS of $0.25 for the same period compares with $0.28 a year ago.
For the current quarter, Avantor is expected to post earnings of $0.25 per share, indicating no change from the year-ago quarter. The Zacks Consensus Estimate has changed -0.4% over the last 30 days.
Avantor has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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Why Is Pediatrix Medical Group (MD) Up 9.5% Since Last Earnings Report?
A month has gone by since the last earnings report for Pediatrix Medical Group (MD - Free Report) . Shares have added about 9.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Pediatrix Medical Group due for a pullback? 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.
Pediatrix Q2 Earnings Beat Estimates on Stable Volumes
Pediatrix reported second-quarter 2024 adjusted earnings per share (EPS) of 34 cents, which outpaced the Zacks Consensus Estimate by 9.7%. However, the bottom line declined 12.8% year over year.
Net revenues inched up 0.7% year over year to $504.3 million on the back of growth in same-unit revenues. The top line, however, missed the consensus mark of $506 million.
MD’s better-than-expected earnings benefited from stable patient volumes and improved hospital contract administrative fees. However, the upside was partly offset by an increased expense level resulting from rising practice salaries and benefits, and transformational and restructuring-related costs.
PediatrixMedical reported second-quarter 2024 adjusted earnings per share (EPS) of 34 cents, which outpaced the Zacks Consensus Estimate by 9.7%. However, the bottom line declined 12.8% year over year.
Net revenues inched up 0.7% year over year to $504.3 million on the back of growth in same-unit revenues. The top line, however, missed the consensus mark of $506 million.
Q2 Update
Overall, same-unit revenues increased 2.8% year over year. Same-unit revenues, attributable to patient volume, grew 0.4% year over year.
Same-unit revenues from net reimbursement-related factors inched up 2.4%, attributable to decent growth in hospital contract administrative fees and improved payor mix.
Pediatrix Medical’s total operating costs of $662 million increased 46.4% year over year, higher than our estimate of $470.1 million. The rise was due to higher practice salaries and benefits, practice supplies and other operating expenses, coupled with the incurrence of transformational and restructuring-related expenses and goodwill impairment, amongst others, in the second quarter.
Practice salaries and benefits increased 1.1% on a year-over-year basis. This is mainly due to rising same-unit clinical compensation costs, partially offset by the impact of practice dispositions. Meanwhile, practice supplies and other expenses witnessed an uptick of 4.1% year over year. Our estimate indicated the two expense components to increase 3.2% and 6.7%, respectively, on a year-over-year basis. General and administrative expenses declined 2.5% year over year in the second quarter against our estimate of a 0.6% rise.
Transformational and restructuring-related costs of $13.6 million stemmed from revenue cycle management transition activities and practice dispositions.
Interest expenses of $10.3 million declined 8% year over year and came higher than our estimate of $9.9 million.
Pediatrix incurred a net loss of $153 million against a net income of $28.3 million in the year-ago period.
Adjusted EBITDA fell 2.1% year over year to $57.9 million but beat our estimate of $51 million.
Financial Update (as of Jun 30, 2024)
Pediatrix exited the second quarter with cash and cash equivalents of $19.4 million compared with $73.3 million at 2023-end. There was no leftover capacity as part of its revolving credit facility at the quarter-end.
Total assets of $2 billion slipped 10% from the figure at 2023-end.
Total debt, including finance leases, net, amounted to $630.4 million, which declined 0.5% from the figure as of Dec 31, 2023.
Total shareholders’ equity of $706.5 million declined 16.8% from the 2023-end level.
Net cash used in operating activities was $18.3 million, while the cash usage totaled $11.9 million in the prior-year quarter.
Share Repurchase Update
Pediatrix bought back a nominal number of its common shares for $0.9 million in the first half of 2024. It had a leftover capacity of $3.7 million under its $500 million repurchase program (approved in August 2018) as of Jun 30, 2024.
2024 View Revised
Management continues to forecast adjusted EBITDA between $200 million and $220 million for 2024. The mid-point of the annual guidance indicates a 4.8% improvement from the 2023 reported figure.
Interest expense is estimated to be $40.02 million, indicating a 4.9% decline from the 2023 figure.
Depreciation and amortization expenses are estimated to be $37 million.
Transformational and restructuring-related expenses are expected at $40 million. Income tax expense is forecasted to be in the range of $2.58-$7.98 million.
Net loss is estimated to be between $112.51 million and $97.91 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 7.29% due to these changes.
VGM Scores
Currently, Pediatrix Medical Group has a great Growth Score of A, though it is lagging a bit on the Momentum Score 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 quintile 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
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Pediatrix Medical Group has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Pediatrix Medical Group belongs to the Zacks Medical Services industry. Another stock from the same industry, Avantor, Inc. (AVTR - Free Report) , has gained 3.1% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
Avantor reported revenues of $1.7 billion in the last reported quarter, representing a year-over-year change of -2.4%. EPS of $0.25 for the same period compares with $0.28 a year ago.
For the current quarter, Avantor is expected to post earnings of $0.25 per share, indicating no change from the year-ago quarter. The Zacks Consensus Estimate has changed -0.4% over the last 30 days.
Avantor has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.