InnovAge Posts Mixed Q4 Results; Shares Drop 6.4% Pre-Market

Shares of InnovAge Holding Corp. (INNV) were down 6.4% in Wednesday’s pre-market trading session after the healthcare delivery platform company reported mixed Q4 results.

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Adjusted earnings of $0.05 per share declined 44% compared to the prior-year period. However, revenues jumped 12.5% year-over-year to $171.6 million. The increase in revenues reflected a surge in capitation revenue, which increased 12.5% to $171 million. (See InnovAge Holding stock charts on TipRanks)

InnovAge CEO Maureen Hewitt commented, “We believe the landscape for future growth remains robust and we are pleased with the amount of federal and state legislative activity that we have seen in 2021.”

Hewitt further added, “This is an exciting time to be a PACE provider and we continue to execute on our multi-faceted strategy of organic growth, de novo locations in existing and new states, and acquisitions.”

Looking ahead, the company provided full-year guidance for Fiscal 2022. The company forecasts total revenues in the range of $712 – $725 million. Further, the company expects adjusted EBITDA to range between $60 and $72 million.

Following the Q4 results, Piper Sandler analyst Jeffrey Garro decreased the price target to $20 (71.7% upside potential) from $31 and reiterated a Buy rating on the stock.

Garro thinks that the Fiscal 2022 guidance miss and temporary enrolment freeze at one of the Centers for Medicare and Medicaid Services will overshadow the Q4 results.

However, he added that the downside from recent negative news is already priced into the shares at current levels.

Overall, the stock has a Strong Buy consensus rating based on 3 Buys and 1 Hold. The average InnovAge Holding price target of $22 implies 88.8% upside potential from current levels.