The Joint stock price target lowered to $16 at Lake Street Capital

Investing.com - Lake Street Capital Markets lowered its price target on The Joint Corp (NASDAQ:JYNT) to $16.00 from $20.00 on Monday, while maintaining a Buy rating on the stock. Currently trading at $12.00, the stock sits within analysts’ target range of $10.50 to $20.00, according to InvestingPro data.

The research firm cited progress in The Joint’s corporate clinic transition strategy, noting that 93% of remaining corporate clinics are under Letter of Intent and mostly in the due diligence phase. The company aims to exit 2025 as a pure-play franchisor and hopes to accelerate this process. InvestingPro analysis shows the company maintains strong financial health with a current ratio of 1.59 and minimal debt-to-capital ratio of 0.01.

Lake Street Capital indicated that while financial benefits from transitioning corporate clinic revenues to franchise royalties and fees haven’t been fully realized, the strategic shift should result in a more profitable business with improved margin structure once completed.

The Joint maintains a strong liquidity position with $21.9 million in cash. Lake Street noted that shares currently trade below 10 times next year’s EBITDA, compared to franchise business peers trading at more than 15 times. This valuation perspective aligns with InvestingPro’s comprehensive analysis, which reveals additional insights through its Fair Value calculations and 7 key ProTips available to subscribers.

The price target reduction to $16 was based on a lower 2026 EBITDA estimate, though Lake Street believes shares may remain range-bound in the near term as investors adjust to the new business model.

In other recent news, The Joint Corp. has signed an agreement to sell 31 corporate-owned clinics to its largest franchisee, Joint Ventures, LLC, with the transaction expected to close by June 30. This move will expand Joint Ventures’ ownership to 96 clinics and includes plans to open 10 additional locations. Additionally, The Joint Corp. has announced a stock repurchase program set to begin in August 2025, allowing the buyback of up to $5 million of its common stock. The initiative, authorized by the company’s board, is seen as a reflection of confidence in the company’s long-term strategy.

In a separate development, Scott J. Bowman has been appointed as the new Chief Financial Officer, bringing over 30 years of experience to the role. The company has also expanded its board of directors with the appointment of Sandi Karrmann, who brings extensive human resources experience. Furthermore, The Joint Corp. has refranchised five clinics to Chiro 93, LLC in the Kansas City region. These strategic decisions are part of The Joint Corp.’s ongoing efforts to enhance profitability and streamline operations.

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