LHC Group, Inc.
LHCG
is well poised for growth on the back of a broad range of services, and prudent acquisition and joint ventures.
The stock has gained 96.8%, compared with the
industry
’s growth of 45.7% in a year’s time. Further, the S&P 500 Index rallied 15.7% in the same time frame.
The company — with a market capitalization of $6.72 billion — serves as a post-acute care partner for hospitals, physicians and families in the United States. It anticipates earnings to improve 13.1% over the next five years.
The stock also has a
VGM Score
of B. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy), are better picks than most.
Let’s take a closer look at the factors that substantiate the company’s Zacks Rank #2.
Key Catalysts
LHC Group has been offering a wide array of services through its diverse business segments. These, in turn, have been instrumental in driving the top line.
Within home health services arm, nurses, home health aides and therapists work closely with patients and their families to design and implement individualized treatment plans in accordance with a physician-prescribed plan of care. Increased acquisition activities in this space has helped the company gain a competitive edge.
Through the first half of 2020, the company has been sourcing adequate PPE kits for patients and clinicians. These PPE kits include N95 mask, isolation gown, face shield, gloves, head and shoe covering, appropriate facemask, and a pair of gloves.
Additionally, LHC Group has been committed to making acquisitions and joint ventures to drive inorganic expansion. The company’s pipeline of potential M&A growth opportunities remains robust and is well balanced between Home Health and Hospice.
On Aug 1, 2020, LHC Group finalized a JV with Orlando Health to boost home health and home and community based services (HCBS) in the state of Florida. The company anticipates that JV to generate almost $3.5 million in incremental annualized revenues.
Backed by the M&A pipeline and historic organic growth opportunity, the company remains optimistic and bullish on both organic and M&A growth opportunities for the remainder of 2020, 2021 and beyond.
Which Way are Estimates Headed?
For 2020, the Zacks Consensus Estimate for revenues is pegged at $2.06 billion, indicating a slight decline of 1.1% from the prior-year quarter. The same for adjusted earnings per share stands at $4.78, suggesting growth of 6.9% from the year-ago reported figure.
Other Stocks to Consider
Some other top-ranked stocks from the broader medical space include Biolase, Inc.
BIOL
, Thermo Fisher Scientific Inc.
TMO
and NextGen Healthcare, Inc.
NXGN
, each carrying a Zacks Rank #2. You can see
the complete list of today’s Zacks #1 Rank stocks here.
Biolase has a projected long-term earnings growth rate of 15%.
Thermo Fisher has an estimated long-term earnings growth rate of 15%.
NextGen has a projected long-term earnings growth rate of 8%.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report