Nobilis Health Corp. N.HLTH

Alternate Symbol(s): NRTSF

Nobilis Health Corp is a full-service healthcare development and management company. It owns and operates healthcare centers and facilities and provides minimally invasive procedures to patients and also utilizes direct to patient marketing and proprietary technologies to drive patient engagement and education. The firm also provides its services to its medical facilities as well as to third parties as a stand-alone service. The company has Medical and Marketing reportable business segments and

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Nobilis Health Corp.

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Post by SBAASTOCKS11on Oct 10, 2015 7:12pm

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Post# 24182671

Thoughts AFTER Q2

Q215 Results Exceed Expectations Guidance Reflects Solid Growth Plans

EVENT: Nobilis Health Corp. released Q215 results exceeding consensus expectations.
DISCUSSION: Q215 revenue increased 223% to $48.9M beating consensus estimate of $40.2M. Adj. EBITDA (excluding non-controlling interest) increased 679% to $7.1M beating all analysts’ estimates.
Q215 growth was driven by a 190% increase in case volume to 4,780 cases and an 11% increase in revenue per case to $10,233.
While operating and corporate costs both increased significantly (up 259% and 409%, respectively) revenue growth was higher leading to the substantial adj. EBITDA growth.
Management raised 2015 guidance to revenue of $233M and adj. EBITDA of $42M (previously $205M and $41M, respectively). Management noted that additional costs associated with ramping up volume at the two new hospitals impact expected adj. EBITDA growth.
Management introduced 2016 guidance including revenue of $320M and adj. EBITDA of $65M (a 20.3% margin).
IMPACT: Positive.
FORECAST/OUTLOOK: We have updated our forecasts to include the Q215 results. We are forecasting 2015 revenue of $238M (previously $235M), adj. EBITDA excluding non-controlling interests of $43.4M (previously $43.3M) reflecting an 18.2% margin (previously 18.4%), and EPS (fd) to NHC shareholders of $0.20 (previously $0.37).
We are forecasting 2016 revenue to increase to $341M (previously $340M), adj. EBITDA excluding non-controlling interests of $69.2M (previously $71.6M) reflecting a 20.3% EBITDA margin and EPS (fd) to NHC shareholders of $0.43. We note our 2015 and 2016 forecasts are higher than current guidance driven by higher revenue expectations.
VALUATION/RECOMMENDATION: Our valuation remains unchanged. We retain our BUY rating, and 12-month target of US$9.50. Our target reflects a 12x EV/EBITDA multiple (unchanged) based on our 2016 forecast. We retain our ABOVE AVERAGE risk rating