The firm also lowered its EBITDA 2016 estimates to reflect slower growth after the company's recent acquisition of IPC Healthcare, a smaller contribution from additional M&A and a modestly higher interest cost. Keybanc analysts lowered their 2016 EBIDTA estimate to $519.6 million from $536.3 million.
"The release of guidance in early 2016 should provide some support to the shares as we believe it will be perceived as a minimum, with some upside potential from IPCM synergies, M&A, and bundling," Keybanc said in an analyst note.
The Knoxville, TN-based company is a provider of outsourced healthcare professional staffing and administrative services to hospitals and other healthcare providers.
Shares of Team Health closed up by 2.17% to $44.21 on Monday.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate TEAM HEALTH HOLDINGS INC as a Buy with a ratings score of B-. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share, increase in net income, good cash flow from operations and notable return on equity. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 10.2%. Since the same quarter one year prior, revenues rose by 26.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- TEAM HEALTH HOLDINGS INC has improved earnings per share by 26.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, TEAM HEALTH HOLDINGS INC increased its bottom line by earning $1.35 versus $1.23 in the prior year. This year, the market expects an improvement in earnings ($2.67 versus $1.35).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Health Care Providers & Services industry average. The net income increased by 28.5% when compared to the same quarter one year prior, rising from $27.59 million to $35.44 million.
- Net operating cash flow has significantly increased by 254.59% to $113.78 million when compared to the same quarter last year. In addition, TEAM HEALTH HOLDINGS INC has also vastly surpassed the industry average cash flow growth rate of 11.35%.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Health Care Providers & Services industry and the overall market, TEAM HEALTH HOLDINGS INC's return on equity exceeds that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: TMH