FORT WORTH, Texas—Q Global Capital Management, L.P., a significant shareholder in ModivCare Inc. (NASDAQ:MODV), has reported the purchase of additional shares in the company. According to a recent SEC filing, the firm acquired a total of 32,917 shares over two days, amounting to $532,030.
On November 4, Q Global Capital Management bought 20,927 shares at a weighted average price of $16.13, with transactions executed within a range of $16.00 to $16.25. The following day, the firm purchased an additional 11,990 shares at a weighted average price of $16.22, with trades occurring between $16.085 and $16.25.
These transactions have increased the firm's total holdings in ModivCare to 1,754,534 shares. The purchases were made through Q Global Capital Management's investment management agreement with Q5-R5 Trading, Ltd. The filing notes that Q Global Advisors, LLC, Renegade Swish, LLC, and Geoffrey P. Raynor are all associated with the ownership structure but disclaim beneficial ownership except for any indirect pecuniary interest.
In other recent news, ModivCare Inc. has seen several significant developments. Lake Street Capital Markets has revised its price target for ModivCare from $50.00 to $30.00, maintaining a Buy rating despite challenges in collecting a significant portion of its receivables and a resulting revision in earnings guidance. ModivCare reported difficulties in collecting around $60 million of its $159.3 million in current contract receivables, primarily from Managed Care Organization customers.
These collection issues have led to a lowered forecast for Adjusted EBITDA for 2024, with the company setting new guidance, anticipating a 10% growth in Adjusted EBITDA in 2025. In addition, ModivCare reported Q2 2024 revenue of $698 million and adjusted EBITDA of $45 million. Despite growth in the non-emergency medical transportation segment, the company recorded a net loss of $129 million due to a $105 million goodwill impairment in the remote patient monitoring segment.
ModivCare has reaffirmed its full-year 2024 revenue guidance of $2.7 billion to $2.9 billion. The company remains focused on optimizing operations to achieve a leverage ratio of 3 times and is confident in its ability to manage through client churn and maintain strong relationships. These recent developments reflect the ongoing adjustments and strategic decisions ModivCare is making in response to its current financial situation.
InvestingPro Insights
Q Global Capital Management's recent share purchases in ModivCare Inc. (NASDAQ:MODV) come at a time when the company's financial metrics present a mixed picture. According to InvestingPro data, ModivCare's market capitalization stands at $240.37 million, reflecting the firm's current valuation in the market.
Despite the recent insider buying, which often signals confidence in a company's prospects, ModivCare faces some financial challenges. An InvestingPro Tip indicates that the company is operating with a significant debt burden, which could impact its financial flexibility. Additionally, the company is quickly burning through cash, a factor that investors should consider when evaluating the stock's potential.
On a more positive note, another InvestingPro Tip suggests that net income is expected to grow this year, which could be a factor in Q Global Capital Management's decision to increase its stake. This growth expectation is further supported by analysts' predictions that the company will be profitable this year, as noted in an additional InvestingPro Tip.
The stock's valuation metrics present an interesting picture. ModivCare is trading at a high Price / Book multiple of 25.37, which may indicate that the market has high expectations for the company's future performance. However, it's also trading at a low revenue valuation multiple, potentially suggesting an opportunity for value investors.
For those interested in a deeper analysis, InvestingPro offers 11 additional tips on ModivCare, providing a more comprehensive view of the company's financial health and market position.
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