LHC Group Earnings and Revenues Exceeded Expectations

Beatrice J. Doty
LHC Group in Lafayette reports 79% jump in quarterly profit to $45 million  | Business | theadvocate.com

LHC Group Q4 Earnings and Revenues Exceeded Expectations Miss LHC Group, Inc.’s NYSE LHC WS at https://www.webull.com/quote/nyse-lhc-ws adjusted earnings per share of $1.40 in the fourth quarter of 2020 beat the Zacks Consensus Estimate of $1.37 by 2.2 percent. Furthermore, year over year, the bottom line increased by 21.7 percent.

Information on Profits

The business posted net service revenues of $532.3 million in the quarter, which were 0.3 percent lower than the Zacks Consensus Estimate. Despite this, the top line increased by 0.2 percent year over year.

The business reported net service revenues of $2.06 billion for the full year 2020, which were in line with expectations but down 0.8 percent.

Highlights from the fourth quarter

Total organic growth in home health admissions increased by 2.2 percent year over year in the quarter under review, while organic growth in hospice admissions increased by 10.9 percent.

Revenues from home health services, on the other hand, were $382.6 million, down 1.8 percent from the previous year. 

Update on the Business

This joint venture is expected to generate nearly $8.3 million in additional annualized revenue for the company. LHC Group and CHRISTUS Health announced an extension of their joint venture on November 1, 2020, with a hospice service in San Marcos, Texas. This JV is expected to generate nearly $1.6 million in additional annualized revenue for the company.

Analysis of Margin

The quarter’s gross profit was $215.1 million, up 14.4 percent. The posted quarter’s gross margin was 40.4 percent, up 500 basis points (bps) from the previous year. Operating profit was $50.9 million, up 56.8% from the same period last year. The operating margin was 9.6%, down 350 basis points.

Guidance for 2021

According to the company, net service revenues are expected to be $515-530 million in the first quarter of 2021. For the same, the Zacks Consensus Estimate is $543.2 million.

The adjusted earnings per share are expected to range between $1.20 and $1.30. The consensus price target for the stock is $1.39 per share. The organization expects net service revenues to range between $2.2 and $2.26 billion for the full year of 2021. For the same, the Zacks Consensus Estimate is $2.24 billion. The adjusted earnings per share are expected to range between $5.65 and $5.90. The current consensus price for the stock is $5.99 per share.

Since then, how have estimates progressed?

Investors have seen a downward trend in estimate revisions over the last month. As a result of these shifts, the consensus estimate has changed to -9.45%.

Scores for VGM

LHC currently has a fantastic Growth Ranking of A and a similar rating on the momentum front. The stock was given a B on the value side, placing it in the second quintile for this investment strategy, following a similar direction. The stock has a VGM Score of A on the whole. This score could pique your attention if you aren’t committed to a single strategy.

Perspectives

The stock’s estimates have been trending down, and the size of these changes suggests a downward change. It should come as no surprise that LHC has a Zack Rank. You can find other good stocks like nasdaq upst at https://www.webull.com/quote/nasdaq-upst.

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