17 Jul Modivcare: Growing by Serving Vulnerable Patient Populations
Modivcare Inc. (NASDAQ: MODV) is a technology-enabled healthcare services company providing integrated supportive care solutions for payors and their members.
The Company
Modivcare’s value-based solutions address the social determinants of health or SDoH, connect members to care, help health plans manage risks, reduce costs, and improve health outcomes. The Company provides non-emergency medical transportation, or NEMT, personal care, remote patient monitoring, or RPM solutions, which serve similar, highly vulnerable patient populations.
Image Source: Company
The technology-enabled operating model includes NEMT core competencies in risk underwriting, contact center management, network credentialing, claims management, and non-emergency medical transportation management. Additionally, its personal care services include placements of non-medical personal care assistants, home health aides, and nurses primarily to Medicaid patient populations needing care monitoring and assistance performing daily living activities in the home setting, including senior citizens and disabled adults. ModivCare’s remote patient monitoring services include personal emergency response systems, vitals monitoring, and data-driven patient engagement solutions. ModivCare is further expanding its offerings to include meal delivery and working with communities to provide meals to food-insecure individuals.
The Company also holds a 43.6% minority interest in CCHN Group Holdings, Inc. and its subsidiaries, which operates under the Matrix Medical Network brand. Matrix maintains a national network of community-based clinicians who deliver in-home and on-site services and a fleet of mobile health clinics that provide community-based care with advanced diagnostic capabilities and enhanced care options.
Modivcare Inc. (NASDAQ: MODV)
Market Cap: $763.86M; Current Share Price: $53.92
Data by YCharts
We’ll discuss key elements that make the Company an exciting watch.
- Growing Addressable Markets
Over the long term, numerous factors could affect growth within the industries in which Modivcare operates:
Thus, while the Total Addressable Market for Modivcare’s services currently stands at about $80 billion, it may expand to about $150 billion by 2025, as shown below.
Image Source: Company
Medicare seems poised to benefit from this opportunity, thanks to its expansive reach, market-leading solutions, and commitment to quality.
- Effective multifaceted growth strategy
The Company aims to align all its supportive care services to bring together best practices, drive scale and efficiencies, and standardize processes to ensure the best experience for members and customers.
More specifically, it aims to
- Provide High-Quality Supportive Care to At-Risk Populations
- Strategic Expansion of Supportive Care for SDoH
- Expansion into Nutritional Meal Delivery
- Advanced Broader Technology Strategy
- Capitalize on Evolving Medicare Advantage Momentum
Overall, the Company is focused on execution, growth, and results. The success of Modivcare’s strategies is evident from the fact that the Company has grown from a stand-alone NEMT provider to a national platform with market-leading solutions, as shown below.
Image Source: Company
It seems that the Company has formulated sound growth strategies and thus will continue to grow from strength to strength.
- Attractive Financial Growth Profile
The Company has consistently shown strong growth across each of its segments.
In Q1 FY23, Medicare reported service revenue of $662.3 million, a 15.3% increase compared to $574.5 million in Q1 FY22. This increase in revenue was primarily attributable to a 4.7% increase in membership and an 11.8% increase in revenue per member in the NEMT segment, coupled with a 4.4% increase in hours worked and a 4.4% increase in rate per hour in the personal care segment.
Adjusted EBITDA was $50.2 million, or 7.6% of revenue, in Q1 FY23, compared to $50.3 million, or 8.8% of revenue, in Q1 FY22.
Adjusted net income was $20.2 million, and adjusted EPS was $1.42 per diluted common share.
For FY22, Modivcare reported service revenue of $2,504.4 million, a 25% increase compared to $1,996.9 million in FY21. During the same period, Adjusted EBITDA was $221.9 million, adjusted net income was $103.4 million, and adjusted EPS was $7.32 per diluted common share.
Image Source: Company
For FY23, Modivcare provided the following guidance:
Image Source: Company
It seems that the Company will achieve the same on the back of several factors, such as recent new contract wins, a strong pipeline for new business, and the continued success of its Home business.
As the US healthcare system increasingly shifts to home-based care, Medicare is well positioned to capitalize on these opportunities with its supportive care services. The Company’s offerings provide high-quality care and services to members cost-effectively, aligning with the evolving needs of the healthcare landscape. Moreover, it remains focused on building scale, driving efficiencies, and operating leverage, and all these efforts should culminate in further growth and success for Medicare.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Click here to please visit our detailed disclosure
Reference:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1220754/000122075423000024/modv-20230331.htm
https://www.sec.gov/ix?doc=/Archives/edgar/data/1220754/000122075423000009/modv-20221231.htm
No Comments