Chardan Capital Markets Reiterates Rating On Medical Transcription Billing Corp

Chardan Capital Markets reiterated a Buy rating on Medical Transcription Billing Corp MTBC Monday with a $6.25 price target.

Analayst Keay Nakae noted that the company’s proprietary SaaS platform “provides fully-integrated services including mobile health (mHealth), electronic health records (EHR), practice management (PM), and revenue cycle management (RCM) solutions to healthcare providers in the ambulatory setting.”

The revenue management cycle service industry has been highly fragmented, according to Nakae. New regulations were seen as driving industry consolidation and the company’s “primary growth strategy is to acquire smaller revenue cycle management companies and then migrate the customers of those companies onto its more cost effective platform.”

MTBC keeps its costs low by employing approximately 2000 people in Pakistan where the labor cost is one-tenth of the United States and 50 percent less than India. Lower labor costs have given the company a substantial cost advantage over competitors.

Nakae wrote that that integration of Omni Medical Billing Services, Practicare Medical Management and CastleRock Solutions has continued as planned following the acquisitions in 2014. Cost reductions were also achieved by the elimination of 450 sub-contractors in India and approximately 100 in the U.S.

Looking forward, Nakae expected improved margins in 2015. The analyst wanted to see a “significant reduction in operating expense” in Q1 2015 compared to Q4 2014” which could move the company toward 30 percent EBITDA margins during the second half of 2015.

Medical Transcription Billing Corp recently traded at $2.79, up 3.34 percent.