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KeyBanc Upgrades Inovalon, Remains Bullish On Future Expectations

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KeyBanc Upgrades Inovalon, Remains Bullish On Future Expectations

Inovalon Holdings Inc (NASDAQ: INOV) has reported several quarters of strong bookings and appears poised to deliver positive financial surprises going ahead, after years of posting disappointing results, according to KeyBanc Capital Markets.

The Analyst

KeyBanc’s Donald Hooker upgraded Inovalon to Overweight while maintaining a price target of $22.

The Thesis

After a few years of Inovalon underperforming financial expectations, the stock seems to have been “left for dead” by investors, Hooker said in the note.

He added, however, that the company could beat expectations going ahead, as it seems to be back on a growth trajectory and Street estimates remain low.

Inovalon has generated an annualized contract value of $156 million, representing 70% year-on-year growth. This includes a series of deals with UnitedHealth Group Inc (NYSE: UNH), Molina Healthcare, Inc. (NYSE: MOH) and Humana Inc (NYSE: HUM).

The company could generate revenues of more than $700 million in 2019, of which more than 80% could consist of recurring subscription fees in growing verticals, like Medicare Advantage, Hooker said.

The analyst believes Inovalon could achieve revenue growth in 2020, along with around 50 basis points of EBITDA margin expansion, driven by economies of scale on G&A (general and administrative) expenses.

Price Action

Shares of Inovalon were up 3.71% at $16.22 at the time of publishing.

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Latest Ratings for INOV

DateFirmActionFromTo
Oct 2019Initiates Coverage OnBuy
Aug 2019UpgradesSector WeightOverweight
Aug 2019MaintainsEqual-Weight

View More Analyst Ratings for INOV
View the Latest Analyst Ratings

Posted-In: Donald Hooker KeyBanc Capital MarketsAnalyst Color Upgrades Analyst Ratings

 

Related Articles (HUM + INOV)

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Latest Ratings

StockFirmActionPT
ELMDDougherty & Co.Initiates Coverage On12.0
MRNSCantor FitzgeraldAssumes7.0
MNRLCapital One FinancialInitiates Coverage On23.0
SONVertical GroupUpgrades
UNPMorgan StanleyMaintains136.0
View the Latest Analytics Ratings
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