NEW YORK, NY / ACCESSWIRE / August 29, 2016 / SeeThruEquity, a leading independent equity research and corporate access firm focused on smallcap and microcap public companies, today announced it has issued an update on Hooper Holmes Inc.
The report is available here: HH August 2016 Update Note.
Hooper Holmes Inc. (NYSE MKT: HH, "Hooper Holmes") provides a comprehensive suite of health and wellness solutions to business and government employers in the United States. Hooper Holmes' fully integrated health and wellness solutions are designed to be best-in-class in the industry - utilizing proprietary technology to offer biometric screenings, data collection / management, health coaching, a wellness portal and other educational resources. Based in Olathe, Kansas, the company currently provides health and wellness solutions to over 3,000 employers with approximately 1mn plan participants. Hooper Holmes appears well-positioned to grow these figures substantially over the next several years as it targets the $7Bn+ annual market opportunity for health and wellness services in the United States. Indeed, the company has a 100+ year history in the healthcare industry, and has developed a growing business over the last several years providing biometric screening, risk assessment and clinical research data collection. The company reposted solid 2Q16 results, with highlights including:
- Revenues of $7.64mn were up 5.5% sequentially; 1H16 revenues of $14.88 were up 11.5% versus 1H15
- Gross margins rose to 23.1% in 2Q16 and grew more than 300bps in 1H16 to reach 21.7%, versus 18.2% in 1H15
- Hooper Holmes reiterated 2016E revenue guidance of $42mn and stated that it had experienced strong order trends
Additional highlights from the note are as follows:
Solid results in 2Q16 and 1H16
Hooper Holmes reported solid top line results in 2Q16 with revenues coming in at $7.64mn, up 5.5% sequentially and essentially flat versus 2Q15. First half revenues of $14.88mn were up 11.5% over 1H15. Hooper Holmes is experiencing growing demand for on-site and alternative biometric screening services, which are expected to be continued growth drivers. During the quarter the company also announced a screening agreement with MinuteClinic, the walk-in clinic of CVS and Target stores. This is clearly a nice extension of Hooper Holmes' existing network, expands the company's reach and raises the level of convenience offered to customers.
HH reiterates guidance, targeting positive cash flow
We were impressed by CEO Henry Dubois' commentary that Hooper Holmes was seeing screening orders coming in earlier and at a higher velocity than historical trends. While we were aware that 2H16 was seasonally strong, we felt encouraged that management reiterated guidance on the call - and referenced order levels through mid-August while doing so. The company is targeting FY16 revenues to be $42mn, which would suggest approximately 30% top line growth over from FY15. Importantly, Hooper Holmes is also predicting positive adjusted EBITDA and operating cash flow for the year. Given that its balance sheet is a key item of concern for many investors, we believe evidence that Hooper Holmes can achieve recurring cash flow would be a major milestone for the company. Although Hooper Holmes did not provide financial guidance beyond 2016E, management has stated a goal of targeting $100mn in annual revenues in the intermediate term and believes its platform can support double-digit operating margins in the $55mn-$60mn revenue range.
Maintaining $6.50 price target following results
We are maintaining our price target of $6.50 following 2Q16 results and the company's outlook. Our target of $6.50 implies a target valuation of 1.3x FYE revenues of $42mn, which we feel is appropriate for a company offering attractive growth potential and operating on the cusp of cash flow generation, but still presenting risks related to its balance sheet liquidity. If achieved, the price target of $6.50 suggest upside potential of 311% from the recent price of $1.58 on August 22, 2016.
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About Hooper Holmes Inc.
Hooper Holmes mobilizes a national network of health professionals to provide on-site health screenings, laboratory testing, risk assessment and sample collection services to wellness and disease management companies, employers and brokers, government organizations and academic institutions nationwide. Under the Accountable Health Solutions brand, the Company combines smart technology, healthcare and behavior change expertise to offer comprehensive health and wellness programs that improve health, increase efficiencies and reduce healthcare delivery costs.
About SeeThruEquity
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.
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Contact:
Ajay Tandon
SeeThruEquity
[email protected]
SOURCE: SeeThruEquity