- Stephens initiated coverage on ModivCare Inc MODV with an Overweight rating and a $145 price target.
- ModivCare represents an attractive opportunity for investors seeking small cap growth exposure to a "differentiated healthcare services model that is highly aligned to payer priorities," the analyst tells investors in a research note.
- The analyst believes the company's three primary business segments should support 7% to 10% annual organic revenue growth and sustainable low-teens adjusted EBITDA growth given the "structural industry trends" of addressing social determinants of health and facilitating home-based care.
- Stephen says that while MODV has ample opportunity to grow its business organically and through M&A, it also sees this platform as an attractive asset for payer-driven vertical integration in healthcare services.
- Despite the attractive growth opportunities, MODV's stock has traded down ~52% from recent highs. It is valued at a ~32% discount to core home-based peer Addus Homecare Corporation ADUS based on Street 2023 EV/EBITDA.
- Price Action: MODV shares are up 2.43% at $104.06 during the market session on the last check Wednesday.
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