LifePoint (LPNT) Thriving On Inorganic Growth, Ample Capital
Zacks Investment Research | Jul 05, 2017 08:21AM ET
LifePoint Health Inc. (NASDAQ:LPNT) is well poised to grow over the long term given a number of acquisitions made over the past few years that gives it a strong foothold in the industry. Divestures made in recent years have also helped the company focus on growth areas. Its strong balance sheet and consistent increase in operating cash flow enable it to use funds for share buyback and acquisitions.
Acquisitions and strategic partnerships forged in the recent years have supplemented the company’s efforts to achieve organic growth in its existing markets. Hospitals newly added to its portfolio have accounted for the majority of its growth.
Early this year, LifePoint entered into a joint venture agreement with a wholly owned subsidiary of LHC Group, Inc. to form In-Home Healthcare Partnership Following this, the company owns and operates its home health agencies and hospices as well as some of LHC’s home health agencies and hospices near its hospitals.
From 2014–2016, acquisitions provided significant EBITDA growth opportunities. The acquisitions are in a transitional phase of outsized margin improvement in 2017, moving toward low double-digit margins. Earlier, the company said that it expects contribution to net revenue ($6.5 billion to $6.6 billion guided) of more than $2 billion and approximately $55 million of incremental adjusted EBITDA in 2017.
Year to date, the company’s shares have added 18% compared with 17% gain by the Zacks categorized Zacks Investment Research
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