CardioNet Upgraded to Hold (BEAT)
March 10, 2010 11:01 AM
Joshua Jennings and Peter Bye of Jefferies & Co. upgraded CardioNet (NASDAQ: BEAT) to Hold based on volume growth and modified reimbursement expectations. CardioNet revenue of $33.3 million declined 3% year over year but exceeded both the $32.3 million consensus and Jefferies’ $30.5 million forecast. Pro forma EPS results of $0.24 missed the consensus estimate of $0.14 and Jefferies’ estimate of $0.12.
Patient volumes increased 44% Y/Y, but revenues declined secondary to a full quarter of Medicare reimbursement cuts of 33% (instituted on September 1st) and continued commercial reimbursement declines. Jennings and Bye have concluded that CardioNet was able to maintain sales at the $33 million level in Q4 due to a combination of stellar volume growth and commercial rates which exceeded their assumptions.
BEAT shares are up 3.23% today to $6.72 per share. It has shown steady improvement since bottoming out in early December 2009.
