Q4 Earnings Outperformers: McKesson (NYSE:MCK) And The Rest Of The Healthcare Providers & Services Stocks
Wrapping up Q4 earnings, we look at the numbers and key takeaways for the healthcare providers & services stocks, including McKesson (NYSE:MCK) and its peers.
The healthcare providers and services sector, encompassing insurers to hospitals to outpatient care facilities, benefit from the consistent demand for healthcare services. Stable or even recurring revenues can be earned through insurance premiums, patient care contracts, and testing services agreements. However, the business models face challenges such as high operational costs especially if significant labor is involved. Reimbursement pressures from public and private payers can impact margins and an evolving regulatory landscape adds uncertainty to it all. Looking forward, this sector is poised to benefit from tailwinds such as the aging population, which means rising prevalence of chronic diseases. There is also broad demand for value-based care models, which emphasize cost efficiency and patient outcomes. Advances in telehealth, data analytics, and personalized medicine are likely to create new revenue opportunities for companies that can successfully digitize. However, headwinds abound, including labor shortages in clinical settings, continued reimbursement cuts, and regulatory scrutiny over pricing and care quality.
The 40 healthcare providers & services stocks we track reported a satisfactory Q4. As a group, revenues beat analysts’ consensus estimates by 1.6% while next quarter’s revenue guidance was in line.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
With roots dating back to 1833, making it one of America’s oldest continuously operating businesses, McKesson (NYSE:MCK) is a healthcare services company that distributes pharmaceuticals, medical supplies, and provides technology solutions to pharmacies, hospitals, and healthcare providers.
McKesson reported revenues of $95.29 billion, up 17.8% year on year. This print fell short of analysts’ expectations by 0.7%. Overall, it was a slower quarter for the company with some shareholders anticipating a better outcome.
McKesson Total Revenue
The stock is up 10% since reporting and currently trades at $667.09.
With a nationwide network of 177 locations serving 43 states and a team of over 4,500 clinicians, Option Care Health (NASDAQ:OPCH) is the largest independent provider of home and alternate site infusion services, delivering medications and clinical support to patients across the United States.
Option Care Health reported revenues of $1.35 billion, up 19.7% year on year, outperforming analysts’ expectations by 4.9%. The business had an exceptional quarter with a solid beat of analysts’ full-year EPS guidance estimates.
Option Care Health Total Revenue
The market seems happy with the results as the stock is up 6.3% since reporting. It currently trades at $34.71.
Transforming how doctors care for seniors by shifting financial incentives from volume to outcomes, agilon health (NYSE:AGL) provides a platform that helps primary care physicians transition to value-based care models for Medicare patients through long-term partnerships and global capitation arrangements.
agilon health reported revenues of $1.52 billion, up 44.2% year on year, in line with analysts’ expectations. It was a softer quarter as it posted full-year EBITDA guidance missing analysts’ expectations and a significant miss of analysts’ EPS estimates.
agilon health delivered the weakest full-year guidance update in the group. The company added 2,000 customers to reach a total of 527,000. Interestingly, the stock is up 24.9% since the results and currently trades at $4.52.
Pioneering a data-driven approach to family building that has achieved an industry-leading patient satisfaction score of +80, Progyny (NASDAQ:PGNY) provides comprehensive fertility and family building benefits solutions to employers, helping employees access quality fertility treatments and support services.
Progyny reported revenues of $298.4 million, up 10.6% year on year. This number topped analysts’ expectations by 7.6%. Overall, it was a very strong quarter as it also logged a solid beat of analysts’ sales volume estimates and EBITDA guidance for next quarter exceeding analysts’ expectations.
Progyny pulled off the biggest analyst estimates beat among its peers. The stock is down 5.4% since reporting and currently trades at $21.61.
With over 80% of its revenue derived from federal government contracts, Humana (NYSE:HUM) provides health insurance plans and healthcare services to approximately 17 million members, with a strong focus on Medicare Advantage plans for seniors.
Humana reported revenues of $29.2 billion, up 13.5% year on year. This result beat analysts’ expectations by 1.1%. More broadly, it was a mixed decent as it also produced full-year revenue guidance exceeding analysts’ expectations.
The company lost 11,000 customers and ended up with a total of 16.35 million. The stock is up 1.6% since reporting and currently trades at $270.98.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
Join Paid Stock Investor Research
Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.
