Nutex Health stock price target maintained at $300 by Benchmark

Investing.com - Benchmark has reiterated its Buy rating and $300.00 price target on Nutex Health (NASDAQ:NUTX) despite recent stock volatility. According to InvestingPro data, the company maintains a "GREAT" financial health score, and analysis suggests the stock is currently undervalued relative to its Fair Value.

The healthcare company’s shares fell 16% on Wednesday on five times average daily volume, following a 10% climb on Tuesday. Despite this recent volatility, the stock has delivered an impressive 265% return year-to-date. The volatility began in late May when Blue Cross Blue Shield of Georgia filed a lawsuit against two providers using the arbitration process under the No Surprise Act (NSA) to improve reimbursement rates.

Nutex Health implemented its arbitration recovery process a year ago and began reporting revenue from successful out-of-network claims recovery in the fourth quarter of 2024. The company turned to arbitration after experiencing approximately 30% payment declines following the NSA’s implementation in January 2022.

The company is currently submitting 60-70% of patient visits to arbitration with more than an 80% success rate. Operationally, Nutex reported 20.5% growth in patient visits during the first quarter, with mature hospitals showing 5.3% growth. This operational success has contributed to remarkable revenue growth of 141% over the last twelve months. Get deeper insights into Nutex Health’s performance metrics and growth potential with a InvestingPro subscription, which includes 8 additional ProTips and comprehensive financial analysis.

Benchmark’s $300 price target implies a fiscal year 2025 EV/EBITDA multiple of 6.1x, representing a discount to hospital peer groups. Currently trading at an EV/EBITDA of 4.36x and P/E of 14.76x, with a healthy current ratio of 2.27, the company shows strong financial fundamentals. The firm continues to list Nutex Health as a "Benchmark Best Idea" while noting the company remains on track to open three new hospitals in the second half of 2025.

In other recent news, Nutex Health has reported a significant financial upturn in its first-quarter results for 2025. The company achieved a remarkable 214% increase in revenue year-over-year, reaching $211.8 million. This surge was largely driven by successful outcomes in rate arbitrations under the No Surprise Act, contributing approximately $105 million to the revenue. Nutex Health’s adjusted EBITDA also saw substantial improvement, reaching $72.8 million from a loss in the previous year, while net income stood at $14.6 million.

In another development, Benchmark analysts have raised Nutex Health’s stock target to $300, maintaining a Buy rating, following the robust first-quarter earnings. The company is also planning to expand its operations by opening three new hospitals in Texas later in 2025. Additionally, Nutex Health has appointed Grant Thornton LLP as its new independent registered public accounting firm for the fiscal year ending December 31, 2025, replacing CBIZ (NYSE:CBZ) CPAs P.C. This change is part of Nutex Health’s efforts to enhance the integrity and accuracy of its financial reporting.

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