NEW YORK, NY / ACCESSWIRE / October 17, 2016 / SeeThruEquity, a leading independent equity research and corporate access firm focused on small-cap and micro-cap public companies, today announced it has issued an update on Medical Transcription Billing, Corp. (MTBC).
The report is available here: MTBC October 2016 Update Note. SeeThruEquity is an approved equity research contributor on Thomson First Call, Capital IQ, FactSet, and Zack’s. The report will be available on all of these platforms. The firm also contributes its estimates to Thomson Estimates, the leading estimates platform on Wall Street.
Based in Somerset, NJ Medical Transcription Billing, Corp. (Nasdaq CM: MTBC) is a healthcare information technology company that provides a fully integrated suite of web-based solutions and related business services to hospital-based and private healthcare providers. MTBC became a public company in July 2014, after several years of strong growth through both acquisitions and organic means as a private healthcare technology company. Through its flagship software-as-a-service (SAAS) platform Practice Pro, MTBC “brings big practice solutions” to over 750 small and medium sized medical practices, helping more than 1,700 providers grow and track sales, streamline operations, and use data to facilitate better business and clinical decision making.
Highlights from the update are as follows:
MTBC announces large acquisition
On October 5, 2016, MTBC announced that it had completed what it characterized as its largest acquisition to date. The company completed the acquisition of MediGain LLC (“MediGain”), as well as its affiliate, Millennium Practice Management, LLC (“Millennium”). Both entities specialize in providing medical billing services, with MediGain based in Texas and Millennium based in New Jersey. The announcement was consistent with management’s strategy to augment growth with strategic acquisitions that can be quickly accretive to results – and marked the company’s fourth deal in 2016 and tenth since 2014. The purchase price for the company was $7mn, including a $2mn payment which has been made, and the obligation to make a $5mn payment in early 2017, as well as the assumption of certain liabilities. Given cash on hand of $6.7mn at the end of 2Q16 and a strong seasonal period approaching, we expect MTBC will deploy some of its own cash and will also seek to raise additional capital to finalize the transaction.
Updating estimates following acquisitions
MTBC management indicated that it was able to purchase MediGain at an attractive valuation, which was substantially below an accepted industry M&A metric of 1x revenues. The company also indicated that it expected MedGain to substantially add to revenues in 2017E and also to contribute positive adjusted EBITDA. Considering this, we are updating our 2017E revenue and EBITDA estimates to $35mn and $2.5mn, respectively. We are reducing our 2016E revenue and adjusted EBITDA estimates to $24.5mn and $0.5mn, respectively, to reflect that the acquisition will only impact 4Q16. These numbers assume seasonal strength in the second half of the year and reflect the company’s last public guidance of $27mn – $30mn in revenues (which had assumed he acquisition would close earlier in the year).
Maintaining target of $3.85 for MTBC
We leave our target unchanged at this time. We continue to view MTBC as an attractive company in the healthcare technology industry that offers exposure to a massive market opportunity at a compelling valuation. If achieved, the price target of $3.85 represents potential upside of 318.5% from the recent price of $0.92.
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About Medical Transcription Billing, Corp.
Medical Transcription Billing, Corp. is a healthcare information technology company that provides a fully integrated suite of proprietary web-based and mobile health solutions, together with related business services, to healthcare providers throughout the United States. Our integrated Software-as-a-Service (or SaaS) platform helps our customers increase revenues, streamline workflows and make better business and clinical decisions, while reducing administrative burdens and operating costs. MTBC’s common stock trades on the NASDAQ Capital Market under the ticker symbol “MTBC,” and its Series A Preferred Stock trades on the NASDAQ Capital Market under the ticker symbol “MTBCP.”www.mtbc.com.
Since its founding in 2011, SeeThruEquity has been committed to its core mission: providing impactful, high quality research on underfollowed smallcap and microcap equities. SeeThruEquity has pioneered an innovative business model for equity research that is not paid for and is unbiased. SeeThruEquity is the host of acclaimed investor conferences that are the ultimate event for publicly traded companies with market capitalizations less than $1 billion.
SeeThruEquity is approved to contribute its research reports and estimates to Thomson One Analytics (First Call), the leading estimates platform on Wall Street, as well as Capital IQ and FactSet. SeeThruEquity maintains one of the industry’s most extensive databases of opt-in institutional and high net worth investors. The firm is headquartered in Midtown Manhattan in New York City.