It has become all too common for companies in economically sensitive industries to be facing major earnings and revenues shortfalls due to the recession and the challenges that have been brought on by the COVID-19 pandemic. Some companies have held their own despite the challenges. In a few pockets, some companies have even managed to thrive during the pandemic.
One industry that has seen some benefits is health care technology, showing some bright spots during the COVID-19 uncertainty. Credit Suisse has released a view ahead of the second quarter’s earnings reporting season with a list of companies it sees positioned well for earnings and guidance.
While investors should never use a single analyst call as their sole reason to buy or sell stocks, investors have been looking for areas that can still be rewarding despite an extremely difficult economy. It turns out that as long as people are living, medical technology improvements are always in demand.
The team at Credit Suisse sees multiple companies reporting earnings ahead of consensus expectations. All references to consensus estimates and targets are against the Refinitiv consensus data.
For eHealth Inc. (NASDAQ: EHTH), Credit Suisse sees the bar set very low for the second quarter with 20% revenue growth after a 55% annualized growth in the first quarter. Stringer sign-ups are expected to drive revenue and earnings (before interest, taxes, depreciation and amortization) ahead of expectations.
eHealth last closed at $110.98, in a 52-week range of $52.71 to $152.19. Analysts have a consensus price target of $169.00.
SelectQuote Inc. (NYSE: SLQT) will be reporting its first results as a public company in mid-September, and its shares have held strong since its May 2020 initial public offering. The attractiveness is its diversity in insurance products for seniors, followed by life insurance and the home and auto insurance.
SelectQuote most recently closed at $24.04, in a 52-week range of $22.75 to $29.00. The consensus price target is $32.00.
As for Teladoc Health Inc. (NYSE: TDOC), the telehealth company, should see a high likelihood of revenues coming in at least $10 million to $15 million higher than consensus expectations. On top of strong sign-ups and new members, a higher than expected number of visits should add stickiness to its business model ahead, even if the COVID-19 pandemic manages to get thwarted.
Teladoc Health stock last closed at $228.98, in a 52-week range of $54.58 to $236.27. It has a consensus price target of $178.87.
Change Healthcare Inc. (NASDAQ: CHNG) is not as widely known as the prior companies, but it still has a $3 billion market cap, after having been public for just over a year. Credit Suisse sees it maintaining its 2020 outlook despite not likely offering formal guidance ahead.
Change Healthcare recently closed at $10.05. It has a 52-week range of $6.18 to $17.57 and a consensus price target of $16.35.
Tivity Health Inc. (NASDAQ: TVTY) was noted as having a very fluid situation during the COVID-19 outbreak, particularly for its health care segment, and the firm does not expect guidance to be issued after the recent appointment of a new chief executive officer.
Tivity Health last closed at $11.20, in a 52-week range of $1.92 to $26.07. It has a consensus price target of $14.13.
Premier Inc. (NASDAQ: PINC) previously committed to offering 2020/21 guidance with results in mid-August, and Credit Suisse sees it as premature to assess the impact of COVID-19 on the next fiscal year ending in June of 2021. The resumption of elective procedures and the reopening of non-health-care related facilities should all play into the data.
Premier closed at $31.68, with a 52-week range of $27.11 to $40.13. The consensus price target is $38.39.
HMS Holding Corp. (NASDAQ: HMSY) is expected to only have inline results, but with a focus of cost containment solutions in health care it should remain quite relevant and the increase in Medicaid enrollment should offset any claims pressure.
HMS stock last closed at $32.55, in a 52-week range of $18.20 to $40.67. The consensus price target is $33.64.