NEW YORK (TheStreet) -- Gentiva Health Services (GTIV) rose in after-hours trading on Monday after Kindred Healthcare (KND) announced it would issue a cash tender offer on Tuesday to acquire all outstanding shares of Gentiva.
Kindred will offer $14.50 a share in cash for a total equity value of approximately $573 million, though that number balloons to $1.7 billion once Kindred assumes Gentiva's debt.
Gentiva was up 3.93% to $14.54 at 4:37 p.m.
Separately, TheStreet Ratings team rates GENTIVA HEALTH SERVICES INC as a "sell" with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate GENTIVA HEALTH SERVICES INC (GTIV) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The area that we feel has been the company's primary weakness has been its poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 44.03% is the gross profit margin for GENTIVA HEALTH SERVICES INC which we consider to be strong. Regardless of GTIV's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 0.06% trails the industry average.
- Net operating cash flow has increased to -$17.74 million or 13.70% when compared to the same quarter last year. Despite an increase in cash flow, GENTIVA HEALTH SERVICES INC's cash flow growth rate is still lower than the industry average growth rate of 37.33%.
- GENTIVA HEALTH SERVICES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GENTIVA HEALTH SERVICES INC swung to a loss, reporting -$17.87 versus $0.88 in the prior year. This year, the market expects an improvement in earnings ($0.88 versus -$17.87).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Providers & Services industry. The net income increased by 100.2% when compared to the same quarter one year prior, rising from -$207.18 million to $0.31 million.
- Compared to where it was a year ago today, the stock is now trading at a higher level, and has traded in line with the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
- You can view the full analysis from the report here: GTIV Ratings Report
