CareRx Corporation (TSX:CRRX) posted third-quarter revenue of C$71.3 million, which beat estimates and led to a series of increased price targets across Bay Street
Canaccord Genuity (TSX:CF, LSE:CF) Corp upped its target for CareRx Corporation (TSX:CRRX) stock to $8.50 from $8.25 after what it termed “very healthy” 3Q financial results.
CareRx, which provides of pharmacy services to seniors living communities and other institutional settings, delivered revenue of C$71.3 million for the quarter ended September 30, 2021, handily beating Canaccord’s C$60.5 million estimate.
READ: CareRx Corporation sees 3Q revenue rise by 56%, driven by acquisitions and strong organic growth
The 3Q revenue figure was a 56% year-over-year increase from the comparable quarter in 2020, driven by the company’s acquisition of SmartMeds Pharmacy, Rexall’s LTC pharmacy business and Medical Pharmacies in 2021.
Shareholders are already witnessing margin expansion, Canaccord analysts wrote in a note.
“Adjusted EBITDA increased 79% year-over-year to $6.9 million, with margin expanding from 8% to 10% year-over-year thanks to operating leverage off of the now bigger sales platform and some one-time cost savings,” the analysts noted. “This beat our $4.7 million forecast (8% margin) and consensus of $5.7 million.”
Canaccord maintained its 'Buy' rating on CareRx stock.
Beacon Securities went a step further, raising its target to $10 and maintaining its 'Buy' recommendation.
“Upon the release of the 2Q results, we noted that those results reflected the ‘calm before the 2H storm’ that was set to dramatically transform the company,” Beacon analysts wrote. “The 3Q results reflected the start of this transformation, which will continue into 4Q with a full quarter from Medical Pharmacies with the synergies being realized in 4Q 2021 through 2Q 2022.”
Buys all around
Elsewhere on Bay Street, analysts roundly praised the Canadian company’s earnings.
Stifel GMP left its target price at $8 and maintained its 'Buy' rating, but praised the quarterly results.
“We continue to believe there is a lot to like about this undervalued Canadian pharmacy play,” Stifel analysts wrote.
Desjardins labelled CareRx as its top healthcare pick, citing “multiple” near-term catalysts supporting its 'Buy' rating and $9.50 target price.
iA Capital also upped its target price to $9.50 from $8.75, and maintained a Buy rating on the stock.
Similarly, Echelon upped its price target to $8.75 from $8, citing “compelling value” and labeling the stock a Buy, while Eight Capital kept its $10 target and Buy rating.
Contact Angela at angela@proactiveinvestors.com
Follow her on Twitter @AHarmantas