Q Global Capital Management, L.P., a major shareholder in ModivCare Inc. (NASDAQ:MODV), has recently increased its stake in the company with a significant purchase of shares. According to a recent SEC filing, the firm acquired a total of 82,264 shares over three days, from October 25 to October 29, 2024. The transactions were executed at prices ranging from $14.65 to $15.69 per share, amounting to a total investment of approximately $1,264,636.
The purchases involved transactions on three separate days: 20,556 shares on October 25, 25,496 shares on October 28, and 36,212 shares on October 29. The acquisitions reflect Q Global Capital Management's continued confidence in ModivCare's business prospects.
These transactions were reported under Q Global Capital Management's investment management agreement, with the shares being held by Q5-R5 Trading, Ltd. The filing also notes that Q Global Advisors, LLC, Renegade Swish, LLC, and Geoffrey P. Raynor, all associated with Q Global Capital Management, are deemed beneficial owners of these shares only to the extent of their indirect interest.
This filing illustrates Q Global Capital Management's strategic positioning in ModivCare, highlighting its role as a significant stakeholder in the transportation services company.
In other recent news, ModivCare Inc. has been the subject of significant attention following its recent earnings report and subsequent analyst commentary. The healthcare services provider reported flat year-over-year revenue of $698 million and an adjusted EBITDA of $45 million for the second quarter of 2024. However, the company suffered a net loss of $129 million, largely due to a $105 million goodwill impairment in the remote patient monitoring segment.
Despite these challenges, ModivCare reaffirmed its full-year 2024 revenue guidance of $2.7 billion to $2.9 billion and adjusted its EBITDA guidance to $185 million to $195 million. The company is prioritizing deleveraging its balance sheet and optimizing operations to achieve a leverage ratio of three times.
In other developments, ModivCare disclosed difficulties in collecting approximately $60 million of its current contract receivables, primarily from its Non-Emergency Medical Transportation segment. As a result, the company adjusted its 2024 adjusted EBITDA forecast and set new growth guidance for 2025.
Following these announcements, Lake Street Capital Markets revised its price target on ModivCare from $50.00 to $30.00, but maintained its Buy rating on the company's stock. The firm noted that despite the market reaction, ModivCare operates in large markets with substantial unmet needs and does not foresee the company issuing additional equity at this time.
InvestingPro Insights
Q Global Capital Management's recent share purchases in ModivCare Inc. (NASDAQ:MODV) come at a time when the company's stock has shown significant volatility. According to InvestingPro data, ModivCare has experienced a 10.33% price return in the past week, aligning with the timing of Q Global's acquisitions. This recent uptick contrasts sharply with the stock's year-to-date performance, which shows a substantial decline of 64.81%.
Despite the recent share price struggles, InvestingPro Tips suggest that ModivCare's net income is expected to grow this year, and analysts predict the company will be profitable. This outlook may have influenced Q Global Capital Management's decision to increase its stake, potentially seeing value in the company's future earnings potential.
However, investors should note that ModivCare operates with a significant debt burden and is quickly burning through cash, according to InvestingPro Tips. The company's Price to Book ratio stands at a high 23.17, indicating that the market is placing a premium on the company's assets relative to their book value.
For those interested in a deeper analysis, InvestingPro offers 12 additional tips for ModivCare, providing a more comprehensive view of the company's financial health and market position. These insights could be valuable for investors considering following Q Global Capital Management's lead in increasing their exposure to ModivCare.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.