【免费】JP摩根-美股-医疗服务业-医疗IT：Q4复盘，回调=机会-313-31页.pdf资源-CSDN文库

需积分: 0 98 浏览量 2023-07-29 10:04:15 上传评论收藏 619KB PDF 举报

资源推荐

资源详情

资源评论

www.jpmorganmarkets.com

North America Equity Research

13 March 2020

Equity Ratings and Price Targets

Mkt Cap

Rating

Price Target

Company

Ticker

($ mn)

Price ($)

Cur

End

Date

End

Date

Allscripts

MDRX US

1,012.74

5.51

n/c

9.00

Dec

10.00

n/c

Evolent Health

EVH US

401.43

5.89

n/c

11.00

Dec

12.00

n/c

Health Catalyst

HCAT US

912.42

24.49

n/c

50.00

Dec

n/c

HealthEquity

HQY US

2,896.78

46.90

n/c

90.00

Dec

n/c

Livongo

LVGO US

2,287.41

24.21

n/c

35.00

Dec

43.00

n/c

NextGen Healthcare, Inc.

NXGN US

561.76

9.01

n/c

14.00

Dec

n/c

Phreesia

PHR US

89.73

20.94

n/c

33.00

Dec

n/c

Progyny

PGNY US

1,749.59

20.07

n/c

35.00

Dec

n/c

Source: Company data, Bloomberg, J.P. Morgan estimates. n/c = no change. All prices as of 12 Mar 20.

Healthcare IT

4Q19 Post Mortem; Pullbacks = Opportunity,

Thoughts on the Stocks, COVID-19, and 4Q Prints

Health Care Services –

Distribution, Technology & PBMs

Anne E. Samuel

(1-212) 622-4163

[email protected]

Bloomberg JPMA SAMUEL <GO>

Lisa C. Gill

(1-212) 622-6466

[email protected]

Michael Minchak, CFA

(1-212) 622-6506

michael.minchak@jpmorgan.com

J.P. Morgan Securities LLC

See page 28 for analyst certification and important disclosures.

J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aw

are that

the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as on

ly a single

factor in making their investment decision.

The HCIT group has pulled back 33% since 2/19, due to market volatility (SPX

down 27%) and COVID-19 fears, despite 2020 guides largely in line with or

above expectations. In the near-term, we expect concerns around elective care

disruption, interest rates, leverage, and unemployment to continue to pressure

names like PGNY, HQY, and LVGO, with PGNY and HQY seeing outsized

pullbacks relative to the group at 42% and 46% respectively. That said, HCIT in

general is less exposed to COVID-19 relative to other healthcare services names,

given its largely subscription revenue base and lack of volume/supply chain

disruption (on 3/10 CERN covered by Lisa Gill said that they have not seen any

impact to hospital spending/decision making). Looking longer term, we continue

to like names that have high visibility into 2020 guides, compounding growth

profiles, differentiated offerings and fundamental market drivers. Phreesia remains

our top pick in the space, and we’d point to the pullbacks in PGNY and HQY as

presenting favorable entry points over the long-term for differentiated names that

have historically been viewed as expensive. Herein we outline our latest thoughts

on the stocks coming out of 4Q, any company commentary around COVID-19, our

takes from the prints, and what changes we made to our models post 2020 guides.

Thoughts on the Stocks:

 Phreesia (PHR/OW) – We continue to like the compounding growth profile.

We continue to like this name as a way to play the consumerization of

healthcare trend. Phreesia’s runway is vast, with minimal penetration in its

addressable market, and their biggest competitor, in our view, is the status quo

of non-digital patient intake (paper + people), leaving substantial opportunity to

capture share given the superior patient experience. PHR has an attractive

compounding growth algorithm, with 20% annual revenue growth driving

300bps annual EBIT margin expansion to 20% in the long term. PHR has yet to

report 4Q, and we would point to our 4Q preview (link here) for our focus

points into the print and model positioning.

 Progyny (PGNY/OW) – We view the recent pullback as an opportunity for

those looking longer term. We view the recent outsized pullback vs. the group

over the past month (down 42% vs. SPX down 27%) as an opportunity given

significant visibility into the 2020 guide, as the selling season is complete (57

North America

Equity Research

13 March 2020

Anne E. Samuel

(1-212) 622-4163

[email protected]

new clients added), and early utilization is generally indicative of the year.

Despite the downward move on fears around elective procedure deferral and

employment exposure, feedback post print was generally favorable around the

guidance, as it was better than we expected due to slightly better utilization and

a client taking on the pharmacy benefit earlier. Assessing the downside risk,

while growth in ART cycles slowed during the 2008-2010 downturn (2010 was

down -0.5% from 2008, vs. 3-4% growth rate in prior four years), the decline

was not commensurate with the level of decline in employment (down 6% from

peak to trough in 2008-2010), and so while the number of covered lives may be

impacted by unemployment (noting that the early 2000s downturn only saw a

2% decline in employment), we would expect continued utilization of the

benefit. We continue to believe that PGNY has a differentiated model, and point

to the combination of an outsized growth profile (fastest 2020E grower in our

coverage) and profitability as rare in our space. We model a >50% revenue

CAGR through 2022, with scale driving margin expansion to high teens over

time, up from 8% in 2019.

 HealthEquity (HQY/OW) – While yields should see pressure NT, we

continue to like the long-term market capture opportunity. The company’s

ability to raise 2020 EPS guidance by 15% on its 2/17 sales update call

illustrated that synergies are coming on sooner than expected, and we continue

to like the long-term thesis on this name. Near-term, we attribute the outsized

pullback vs. the group (HQY down 46% since 2/19 vs. SPX down 27%) to

concerns around interest rates, and while this poses a risk to the $1B WAGE

assets that are invested, HQY locks in their rates on the core assets and

previously communicated that yields will represent a headwind to 2020. Their

laddering strategy results in a smoothing of yield increases/decreases vs.

standalone interest rates with less volatility, and they see JumboCD rates as the

best proxy for yield (vs. Fed Funds). We expect the company to speak to this on

their earnings call next week on 3/16, and we believe that there is conservatism

embedded in the synergy numbers leaving some cushion. While integration risk

is always a concern, we believe the combination with WAGE was the right

move for the long term, with the more comprehensive portfolio driving

incremental share capture opportunity.

 Health Catalyst (HCAT/OW) – High visibility to 2020 gives us comfort in

the guide. We like HCAT’s >90% visibility into the 2020 guidance given the

recurring nature of the revenue stream. The back half of the year presents an

opportunity for Medicity conversions, due to a 12-month sales cycle as the

company began cross-sell conversations in summer 2019. Guidance currently

embeds 1-2 Medicity to DOS conversions in 2020, with any additional

incremental to the model. Worth noting, 2H conversions above that number

would likely benefit the 2021 model given the revenue ramp timing. Higher

level, Health Catalyst has significant runway for growth in an $8B TAM with

industry tailwinds, compounding 20% revenue growth driven by mid-teens

annual customer wins, and a path to profitability by 2022E.

 Livongo (LVGO/OW) – Outsized growth continues, with 2020 guidance

better than our expectations. Livongo’s 2020 guidance was better than we

expected, and the company remains on track to hit their long-term targets.

Heading into earnings, LVGO was one of our higher call volume names, and so

far it has held up the best in our group since 2/19 (down -12%) despite its

exposure to employment. We would highlight that 90% visibility to 68% 2020E

North America

Equity Research

13 March 2020

Anne E. Samuel

(1-212) 622-4163

[email protected]

growth is rare in our space, with LVGO the second-fastest 2020E grower in our

coverage universe. Higher level, Livongo remains minimally penetrated in a

vast and growing $28B addressable chronic disease market, leaving substantial

whitespace ahead.

 Evolent (EVH/N) – Staying on the sidelines here given Passport

uncertainty. While 2020E revenue shows nice 20%+ organic growth and

management spoke to high visibility, the Passport RFP event still puts a

substantial portion of 2021 revenue at risk, and 2020 margin guidance was

worse than we were expecting. We remain on the sidelines here.

 Allscripts (MDRX/N) – While growth has stalled, we look forward to

hearing more about steps to right size the cost structure. Growth has slowed

as ~80% of the business is mature. To that end, growth platforms like Veradigm

were slower than we anticipated at 15% in 2019 (the low end of 15-25%

guidance). Attrition was also a $50M headwind to 2020 revenue, resulting

in -1% to +4% revenue growth guidance in 2020, the lowest in our coverage

universe, and below the company’s LT plan for 5.5-9%. That said, we believe

the company is now taking the right steps through its operational review to

ultimately right-size the cost structure to match the slower growth and we look

forward to hearing the results at the upcoming investor day in 10-12 weeks.

 NextGen Healthcare (NXGN/UW) – Flat earnings growth through 2023 and

elevated attrition keep us Underweight. We remain Underweight on NXGN

due to guidance for flat earnings growth through 2023 as the company invests in

R&D to capture growth from value-based care and the consumerism of

healthcare. Despite a material improvement in the fundamentals resulting from

the company’s turnaround strategy, attrition remains elevated. The pace of

growth is now expected to be slower, targeting mid- to high-single-digit revenue

growth by 2023, with acquisition dilution and investments in the platform

resulting in flat earnings growth.

COVID-19 Not Embedded in the 2020 Guides:

 PGNY stated that they have not included COVID-19 in the guide, as their

clinical network has not yet seen an impact on volumes. Specifically, they stated

“as of now, clinics have reported to us that they aren’t seeing impacts on their

appointment volume and our overall member activity continues to be consistent

with our normal expectations.” They also noted, looking back at SARS in 2012-

2013, “When we look back when the SARS hit the U.S., middle of 2012 through

early 2013 and you look at the CDC data and the number of cycles oddly

enough and those two years versus the two prior years, cycles actually grew in

the U.S., they didn’t decline. So if that’s another indicator that, something like

that, I don’t know if that it’s exactly similar to coronavirus. But something that

widespread didn’t have an impact relative to just overall cycles.”

 LVGO – On the 4Q call, LVGO spoke to no anticipated disruption from

COVID-19 having invested in inventory at year end. Specifically, CEO Burke

stated, “We have a varied supply chain across the world and we’re prepared –

we – you may see in our balance sheet, overall, we had invested in inventory at

the end of the year. And frankly that was more of a hedge against the trade

challenges that may – that some of those – that may be disrupted there. But we

North America

Equity Research

13 March 2020

Anne E. Samuel

(1-212) 622-4163

[email protected]

don’t have – we don’t expect any challenges around that and we’ve got quite a

nice stock to prepare for both our large number of launches as well as protect

against any kind of issues from a trade perspective.”

 HCAT – On the 4Q call, CEO Burton stated that they have not seen any impact,

and it is not within guidance stating, “I would share specifically related to your

question that we have not yet seen any impact of the coronavirus, as it relates to

our pipeline or our – and therefore, our forecast either.”

How Did 4Q Stack Up vs. the Street?

 The stocks saw significant volatility on the 4Q prints with only one miss in

the group and most guides in line to above the Street. In 4Q, EVH, HCAT,

HQY, LVGO, and NXGN beat Street models, with HCAT, HQY, and NXGN

putting up in-line guides, and PGNY and LVGO beating Street 2020

expectations. Due to the volatility in the market, reactions were mixed, with

HCAT and HQY up double digits on the prints, while the others were down

substantially. Allscripts missed 4Q and set 2020 guidance below the Street,

resulting in an 8% decline in the stock on the print.

Table 1: 4Q Earnings and Guidance Summary

Performance

Up/Down

on Print

2020 Guidance Guide vs. Street

2020 Guided

Rev Growth

MDRX Miss -8%

Revenue of $1.75

1.85B,

EPS $0.70-0.75

Miss -1% to 4%

EVH Beat -4%

Revenue of $935

985M,

EBITDA of $24-32M

Revenue In

Line,

EBITDA Miss

20%+ Organic

Services

HCAT Beat 10%

Revenue of $185M

188M,

EBITDA of ($23.5M) to ($20.5M)

In-Line 19-21%,

HQY

Beat

11%

Revenue $812

820

Line

54%

LVGO Beat -9%

Revenue of $280M

290M,

EBITDA of ($22M) to ($20M)

Beat 65-71%

NXGN Beat -8%

Revenue of $541

547M,

EPS $0.80-0.84 (guidance lowered)

In-Line 2-4%

PGNY In-Line -8%

Revenue of $395M

415M,

EBTIDA of $41.7-45.3M

Beat 72-81%

Source: Company reports and J.P. Morgan estimates

Our Takes from the Earnings Calls & Mgmt Follow-Ups:

 Allscripts: (1) MDRX announced a management change, with President Rick

Poulton now President & CFO effective 3/3/20, replacing Dennis Olis. (2) The

company is undergoing a comprehensive review of operations to improve

efficiencies, challenge historical planning assumptions, and drive an EBTIDA

margin improvement strategy for the company. They plan to share the results of

the operational review at an investor day in 10-12 weeks. (3) Veradigm, the

company’s growth engine, grew 15% during the year, implying more tempered

1% growth during the quarter (each quarter of the year decelerated), will the full

year at the low end of the company’s long-term plan for 15-25%. Mgmt

attributed the modest growth in the quarter to softer media buy, and a lower

contribution from the NextGen relationship. (4) Bookings guidance of $900M-

$1B implies a YoY decline of -19% to -10%. (5) Attrition from acute care

clients represents a $50M or 280bps headwind to 2020 guidance.

 Evolent Health: (1) Premium revenue was guided down 25% YoY due to the

termination of the reinsurance agreement with New Mexico Health Connections

in 4Q partially offset by some growth at the core. (2) EBITDA was guided

North America

Equity Research

13 March 2020

Anne E. Samuel

(1-212) 622-4163

[email protected]

below $40-50M run rate due to additional expenses from seven first quarter

launches, a ramp in NCH new partnership profitability, and additional Passport

RFP associated expenses. (3) Guidance assumes higher PMPM but lower lives

(low- to mid-3M range), due to a strategic move away from lower PMPM

subscale revenue partnerships.

 Health Catalyst: (1) HCAT added 15 new DOS subscription customers in the

quarter, putting them at 65, and this was one customer above our model.

Looking to next year, guidance embeds a similar level of mid-teens customer

additions to the base, largely weighted towards 2Q (40%) and 4Q (40%). (2)

Dollar-based retention increased to 109%, up from 107% in 2018 and 108% in

2017. (3) HCAT saw three Medicity conversions to DOS in the quarter, with

two having already been in the pipeline. Looking to 2020, guidance embeds a

similar level of conversions, with the cross-sell cadence to be weighted more

towards 2H of the year given the roughly year-long sales timeline. (4) The

AbleHealth acquisition closed in the quarter, and fits into the apps layer, adding

capabilities in quality and regulatory reporting. Mgmt spoke to many

opportunities in the future to add this type of tuck-in acquisition into the apps

layer with a robust pipeline ahead.

 Livongo: (1) EVA grew 84% in 2019. Management expects 50% of 4Q EVA to

convert to revenue in the next 12 months (vs. 40% in 3Q), with fluctuations in

this rate driven by timing of client launches, duration of agreements, and mix of

products. EVA should be lumpy quarter to quarter depending on the timing of

agreements, with more selling done in 2H of the year due to benefits seasonality.

(2) On track for continued leverage despite investments in 2020. Despite

investments in future growth around people in sales and marketing, the R&D

team, and data scientists (largely 2H weighted), LVGO expects to expand

margins by ~400bps in 2020, and remains on track to reach profitability in 2021.

Gross margins have already reached the longer-term target of 72-74%, so the

expansion will come largely from operating expense leverage driven by the

rapid revenue growth. (3) Diabetes members grew 96% YoY and 7%

sequentially to 223K members. Clients grew 95% YoY to 804. (4) No

anticipated disruption from the COVID-19. On the call, CEO Burke spoke to a

varied supply chain, and having invested in inventory at year end as a hedge

against potential trade challenges resulting in the company being comfortable

with its ability to service expected growth.

 Progyny: (1) Guidance outperformance vs. expectations was largely driven by

two factors: (a) a client taking on the Rx benefit sooner than anticipated

(initially planned for July) driving ~65% of the upside vs. our model, and (b)

better utilization of existing clients the remainder. (2) Stronger growth guided in

1Q relative to the year driven by a large client that was added in April cycling

into 1Q with no comparable revenue in the prior year. (3) COVID-19 impact is

not embedded in the guidance, as to date, clients have not reported seeing any

impacts on appointment volume. The company spoke to looking at historical

SARS impact on fertility volumes, and noted that in 2012-2013, ART cycles

actually grew in the US. (4) Of the 57 clients added this selling season, four are

remaining to launch starting in 2Q20. The majority of clients added this selling

season came from industries outside of tech including media, manufacturing,

food & beverage, pharmaceutical, consumer packaged goods, energy, retail and

financial services.

剩余30页未读，继续阅读

评论收藏

内容反馈

2301_76429513

粉丝: 9
资源: 6730

JP 摩根-美股-医疗服务业-医疗IT：Q4复盘，回调=机会-313-31页.pdf

最新资源

JP 摩根-美股-医疗服务业-医疗IT：Q4复盘，回调=机会-313-31页.pdf

JP 摩根-美股-医疗保健行业-北美医疗行业Q4预览-221-24页.pdf

JP 摩根-美股-医疗科技行业-美国医疗科技与分发：Q4结果-3-75页.pdf

JP 摩根-美股-医疗保健行业-美国医疗业：如何看待波动中的空间-313-38页.pdf

JP 摩根-美股-医疗保健行业-家庭与个人医疗Q4预览-118-35页.pdf

JP 摩根-美股-医疗科技行业-美国制药业：关于COVID-19对企业影响的思考-428-31页.pdf

JP 摩根-美股-医疗科技行业-医疗科技与分发：盈利预览-125-27页.pdf

JP 摩根-美股-信贷策略-REIT事实：Q4模型更新-3-75页.pdf

JP 摩根-美股-航空业-美国航空业Q4总结-128-29页.pdf

JP 摩根-美股-医疗保健行业-医疗科技与渠道：消费者继续重塑医疗保健-9-76页.pdf

JP 摩根-美股-医疗保健行业-美国医疗业：超越COVID-19 ——衰退环境中的医疗保健-3-38页.pdf

JP 摩根-美股-医疗保健行业-JP 摩根医疗会议要点-114-53页.pdf

JP 摩根-美股-医疗保健行业-医疗科技与分发：从旧金山我们了解到什么-114-29页.pdf

JP 摩根-美股-医疗保健行业-美国医疗信息服务：第18次医院年度调查要点-523-25页.pdf

JP 摩根-美股-医疗科技行业-医疗科技与渠道：四季度对COVID-19的思考-3-73页.pdf

JP 摩根-美股-支付与IT服务业-万事达与Visa：支付网络深度研究-315-29页.pdf

JP 摩根-美股-银行业-美国大型银行业Q4预览-13-38页.pdf

相关实用应用程序（Windows可用）

免费可用的ChatGPT网页版.zip

ChatGPT使用总结：150个ChatGPT提示词模板（完整版）

chromedriver-win64.zip

全国计算机二级WPSoffice精选350道选择题题库（含答案）.pdf

哈尔滨工业大学-ChatGPT调研报告-2023.3.6-94页.pdf

农村公交与异构无人机协同配送优化

李飞飞自传 我看见的世界 The World I see

4个亲测好用的ChatGPT4渠道

152.STM32-外部中断控制数码管加减.zip

零售百货品牌线上多平台整合营销策划方案【零售商场】【种草传播】.pdf

最新资源

李飞飞自传我看见的世界 The World I see