Nyse Order Imbalance 56933.0 Shares On Buy Side

The Joint Corp.’s JYNT shares have lost 2.7% since it reported third-quarter 2024 results. The quarterly results were hurt by an elevated general and administrative expense level. Impairment-related charges also affected the bottom line.

Nevertheless, the downside was offset by higher system-wide sales, led by improved royalty fees, advertising fund revenues and software fees.

JYNT reported adjusted earnings per share of 4 cents, which matched the Zacks Consensus Estimate. The bottom line compared favorably with the adjusted loss of 5 cents per share reported a year ago.

Revenues improved 2% year over year to $30.2 million. The top line surpassed the consensus mark by 5.5%.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

The Joint Corp. Price, Consensus and EPS Surprise

The Joint Corp. price-consensus-eps-surprise-chart | The Joint Corp. Quote

JYNT’s Q3 Performance

Revenues from company-owned or managed clinics of $17.5 million dipped 1.9% year over year. Royalty fees advanced 10.2% year over year to $7.9 million in the third quarter. Advertising fund revenues were $2.2 million, up 9.6% year over year. Software fees of $1.4 million improved 10% year over year. Meanwhile, franchise fees fell 7.5% year over year to $0.7 million.

Total cost of revenues amounted to $2.8 million, which escalated 8.4% year over year due to increased regional developer royalties and commissions. General and administrative expenses increased 2.7% year over year to $20.8 million. However, total selling, general and administrative costs dipped 0.4% year over year to $26.8 million.

The Joint incurred a net loss of $3.2 million, wider than the prior-year quarter’s net loss of $0.7 million due to a loss incurred on disposition or impairment.

System-wide sales rose 8% year over year to $129.3 million. As of Sept. 30, 2024, the company’s total clinic count was 963, lower than the Zacks Consensus Estimate of 975. The number of franchised clinics totaled 838, which was lower than the consensus mark of 864. Yet, company-owned or managed clinics were 125, higher than the consensus estimate of 111.

Adjusted EBITDA tumbled 16% year over year to $2.4 million.

The Joint’s Financial Update (as of Sept. 30, 2024)

JYNT exited the third quarter with cash and cash equivalents of $20.7 million, which increased 14.2% from the 2023-end level.

Total assets of $79.6 million fell 8.7% from the figure at 2023-end.

There was no reported debt under the credit agreement.

Total equity of $20.5 million declined 17.3% from the 2023-end level.

The Joint generated net cash from operations of $5.3 million for the first nine months ended Sept. 30, 2024, which dropped 53.2% from the prior-year period.

The Joint’s 2024 Guidance

The company presently estimates system-wide sales to be in the range of $525-$535 million, down from the prior view of $530-$545 million.

It expects to open 55-60 franchised clinics, down from the earlier view of 60-75.

JYNT’s Zacks Rank

The Joint currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Medical Sector Releases

Of the Medical sector players that have reported third-quarter 2024 results so far, the bottom-line results of Molina Healthcare, Inc. MOH, Encompass Health Corporation EHC and The Ensign Group, Inc. ENSG beat the respective Zacks Consensus Estimate.

Molina Healthcare reported third-quarter adjusted earnings per share (EPS) of $6.01, which beat the Zacks Consensus Estimate of $5.96. Also, the bottom line grew 19% from the year-ago period. Total revenues amounted to $10.3 billion, which improved 20.9% year over year. Also, the top line outpaced the consensus mark by 3.8%. Premium revenues of $9.7 billion increased 18% year over year .

As of Sept. 30, 2024, total membership improved 8% year over year to around 5.6 million. Investment income rose 5.4% year over year to $118 million. Adjusted general and administrative expense ratio decreased to 6.4% in the third quarter from 7.1% a year ago. The consolidated medical care ratio, or MCR, was 89.2% . The metric rose from 88.7% a year ago. Its adjusted net income increased 18% year over year to $347 million.

Encompass Health reported third-quarter adjusted EPS of $1.03, which beat the Zacks Consensus Estimate by 9.6%. The bottom line increased 19.8% year over year. Net operating revenues of $1.4 billion improved 11.6% year over year. The top line beat the consensus mark by 1.7%. EHC’s net patient revenue per discharge rose 2.5% year over year.

Total discharges grew 8.8% year over year 62.7 million, higher than our growth estimate of 61 million. Net and comprehensive income climbed 29.7% year over year to $147.1 million in the third quarter. Adjusted EBITDA of $269.3 million grew 13.4% year over year and surpassed our estimate of $247.1 million. Encompass Health added 10 beds to its existing hospitals in the third quarter. It also inaugurated two de novo hospitals.

Ensign Group reported a third-quarter adjusted EPS of $1.39, which beat the Zacks Consensus Estimate by 1.5%. The bottom line increased 15.8% year over year. Operating revenues of $1.08 billion improved 15% year over year The top line outpaced the consensus mark by 1.7%. Ensign Group’s adjusted net income grew 17.7% year over year to $81.1 million .

Same-store occupancy improved 280 basis points (bps) year over year, while transitioning occupancy expanded 480 bps year over year. The Skilled Services segment’s revenues rose 14.4% year over year to $1 billion in the third quarter. Segment income of $128.5 million improved 9.1% year over year. Skilled nursing and campus operations of the segment totaled 282 and 29, respectively, at the third-quarter end.

Zacks Investment Research

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

Encompass Health (EHC) is a stock many investors are watching right now. EHC is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

EHC is also sporting a PEG ratio of 1.26. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. EHC's PEG compares to its industry's average PEG of 1.87. EHC's PEG has been as high as 1.50 and as low as 1.20, with a median of 1.30, all within the past year.

Another notable valuation metric for EHC is its P/B ratio of 3.90. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 4.26. Over the past 12 months, EHC's P/B has been as high as 3.94 and as low as 2.93, with a median of 3.51.

These are just a handful of the figures considered in Encompass Health's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that EHC is an impressive value stock right now.

Zacks Investment Research

Pediatrix Medical Group, Inc. MD shares have jumped 30.5% since it reported strong third-quarter results on Nov. 1, 2024. The company benefited from growth in same-unit revenues and improved hospital contract administrative fees. However, the upside was partly offset by an increased expense level.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

MD reported third-quarter 2024 adjusted earnings per share (EPS) of 44 cents, which outpaced the Zacks Consensus Estimate by 18.9%. Also, the bottom line jumped 37.5% year over year.

Net revenues inched up 0.9% year over year to $511.2 million. The top line beat the consensus mark by 2.2%.

Pediatrix Medical Group, Inc. Price, Consensus and EPS Surprise

Pediatrix Medical Group, Inc. price-consensus-eps-surprise-chart | Pediatrix Medical Group, Inc. Quote

Q3 Update for MD

Overall, same-unit revenues increased 5.2% year over year, beating the Zacks Consensus Estimate of 1.65%. Same-unit revenues, attributable to patient volume, grew 1.8% year over year.

Same-unit revenues from net reimbursement-related factors inched up 3.4%, attributable to modest growth in hospital contract administrative fees and improved payor mix. It beat the Zacks Conesus Estimate of 0.95%.

Net patient service revenue of $438.7 million grew 0.3% year over year and beat the consensus mark by 0.9%. Hospital contract administrative fees of $72.4 million grew 5.4% from a year ago and beat the estimates by 0.2%.

Pediatrix Medical’s total operating costs of $477.3 million increased 2.4% year over year. The rise was due to higher G&A expenses and the incurrence of transformational and restructuring-related expenses in the third quarter.

Practice salaries and benefits decreased 1% on a year-over-year basis. This is mainly due to declining same-unit medical malpractice expenses and the impact of practice dispositions, partially offset by growth in same-unit clinical compensation costs. Interest expenses of $10.1 million decreased 2.4% year over year.

Pediatrix Medical’s net income of $19.4 million declined from $21.4 million in the year-ago period.

Adjusted EBITDA jumped 19.5% year over year to $60.2 million.

MD’s Financial Update (as of Sept. 30, 2024)

Pediatrix Medical exited the third quarter with cash and cash equivalents of $103.8 million compared with $73.3 million at 2023-end. There were no outstanding borrowingson its revolving credit facility at the quarter-end.

Total assets of $2.08 billion slipped from the $2.22 billion figure at 2023-end.

Total debt, including finance leases, net, amounted to $626.7 million, which declined from the $633.3 million figure as of Dec. 31, 2023.

Total shareholders’ equity of $732.5 million declined from the 2023-end level of $849.1 million.

Operating cash flow was $95.7 million, up from $81.1 million in the prior-year quarter.

Share Repurchase Update for MD

Pediatrix Medical bought back a nominal number of its common shares for $1.1 million in the first nine months of 2024. It had a leftover capacity of $3.5 million under its $500 million repurchase program (approved in August 2018) as of Sept. 30, 2024.

MD’s 2024 View Revised

Management forecasts adjusted EBITDA between $205 million and $215 million for 2024. The mid-point of the annual guidance indicates a 4.8% improvement from the 2023 reported figure. Net loss is estimated to be between $110.32 million and $103.02 million.

Interest expense is estimated at $40.6 million, indicating a 3.6% decline from the 2023 figure. Income tax expense is forecasted to be in the range of $1.99-$4.69 million.

Depreciation and amortization expenses are estimated to be $31.8 million. Transformational and restructuring-related expenses are expected at $48 million.

Zacks Rank & Other Key Picks

Pediatrix Medical currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked and promising stocks in the broader Medical sector are Tenet Healthcare Corporation THC, CareDx, Inc CDNA and Encompass Health Corporation EHC. While Tenet Healthcare currently sports a Zacks Rank #1, CareDx and Encompass Health carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Tenet Healthcare’s 2024 bottom line suggests 63.2% year-over-year growth. THC has witnessed four upward estimate revisions over the past 30 days against no movement in the opposite direction. It beat earnings estimates in all the last four quarters, with an average surprise of 59.9%.

The Zacks Consensus Estimate for CareDx’s current-year earnings indicates a 143.8% year-over-year improvement. CDNA beat earnings estimates in each of the past four quarters, with an average surprise of 135.2%. The consensus mark for revenues suggests 16.8% growth from the year-ago period.

The Zacks Consensus Estimate for Encompass Health’s 2024 full-year earnings implies a 17.3% increase from the year-ago reported figure. EHC beat earnings estimates in each of the last four quarters, with an average surprise of 13.6%. The consensus mark for its current-year revenues is pegged at $5.34 billion, which indicates an 11.3% year-over-year increase.

Zacks Investment Research

Investors interested in Medical - Outpatient and Home Healthcare stocks are likely familiar with Encompass Health (EHC) and Astrana Health, Inc. (ASTH). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, Encompass Health has a Zacks Rank of #2 (Buy), while Astrana Health, Inc. has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that EHC likely has seen a stronger improvement to its earnings outlook than ASTH has recently. But this is only part of the picture for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

EHC currently has a forward P/E ratio of 23.88, while ASTH has a forward P/E of 45.47. We also note that EHC has a PEG ratio of 1.36. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ASTH currently has a PEG ratio of 2.27.

Another notable valuation metric for EHC is its P/B ratio of 3.85. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, ASTH has a P/B of 4.27.

These are just a few of the metrics contributing to EHC's Value grade of A and ASTH's Value grade of C.

EHC sticks out from ASTH in both our Zacks Rank and Style Scores models, so value investors will likely feel that EHC is the better option right now.

Zacks Investment Research