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NRC

National Research NasdaqGS:NRC Stock Report

Last Price

US$39.24

Market Cap

US$971.4m

7D

-1.6%

1Y

-13.1%

Updated

23 Sep, 2022

Data

Company Financials
NRC fundamental analysis
Snowflake Score
Valuation0/6
Future Growth0/6
Past Performance3/6
Financial Health5/6
Dividends3/6

NRC Stock Overview

National Research Corporation provides analytics and insights that facilitate measurement and enhancement of the patient and employee experience in the United States and Canada.

National Research Corporation Competitors

Price History & Performance

Summary of all time highs, changes and price drops for National Research
Historical stock prices
Current Share PriceUS$39.24
52 Week HighUS$52.36
52 Week LowUS$30.93
Beta0.68
1 Month Change11.76%
3 Month Change0.87%
1 Year Change-13.11%
3 Year Change-31.93%
5 Year Change4.09%
Change since IPO96.20%

Recent News & Updates

Sep 18

National Research Corp: Market Is Discounting These Key Factors

Summary Investors continue to compress the National Research Corporation share price in continuation with long-term downtrends. The stock has caught a bid of late as the market continues to reward bottom-line fundamentals over top-line growth. Here I've demonstrated the qualities in NRC's earnings and investment piles that command a re-rating to the stock. Net-net I rate NRC a contrarian buy at a $64 price target. Investment summary There remains many selective opportunities to extract true alpha within the healthcare universe. Here at HB Insights we cover the healthcare sector very well and continue to recognize the opportunity for those looking to shift up in the quality spectrum and add a layer of resiliency to equity portfolios looking ahead. Here I turn to National Research Corporation (NRC) and demonstrate the company has the fundamental criteria to reverse a 2-year period of downside, where shares have been compressed to substantial lows since before the pandemic. NRC's return on its ongoing and existing investments in addition to a resilient earnings profile are attractive features, alongside recent contract activity in its operations. Net-net, I rate NRC a buy for contrarians seeking exposure to quality in the space on a price target of $64. Note, I do not discuss NRC's dividend in this report. Novant – first contract for Human Understanding Program One key takeout from the last quarter for NRC, was that it secured the first contract for its Human Understanding Program ("HUP") with Novant Health. Novant is an integrated network of health systems spanning 4 states and is the owner of 15 medical centres and 600 clinics in these jurisdictions. It has been a long-time customer of NRC and this would have had a bearing on the company's decision to sign the contract by estimate. No financials were discussed on a "client-by-client basis" on the Q2 earnings call, however, management noted Novant has purchased additional products from NRC's portfolio that it hadn't been previously. The particulars aren't entirely clear as of yet but language on the earnings call explains that the HUP provides unique patient data and analytics that can be accessed by primary care givers at the point of care delivery. This is a value-add for Novant and another revenue stream for NRC, that sees the existing client expand its purchasing volume, and also sweep up the remainder of NRC's product line with the HUP embedded into the offering. When asked about any other key differentials for Novant to adopt the HUP, CEO Michael Hays said: "The readiness of that organization in adopting new things is pretty traditional, so that didn't necessarily surprise us. I think the tipping point at Novant quite frankly and the other ones that are unfolding is that the mission of most healthcare organization is to treat each patient as a unique person and personalize the care that is being delivered. And Novant, as long as other healthcare systems have always professed that that's the reason and the underlying driver of their mission, but they've never really been able to perform that at scale. And Novant’s Board is very focused on treating each person is unique. So we fit in clearly with the driver of their mission and this helped enable it. That no doubt had impact in consolidating or condensing the decision cycle. So long way to say it was a happy customer that wanted to purchase more to drive the purpose of their business." We've been keeping a close eye on any movement on this segment and I'll be looking very closely at the numbers for this new venture. NRC Q2 earnings pile supportive of further upside capture The company came in with a mixed set of numbers in Q2 FY22 with equally mixed results vertically throughout the P&L. Overall revenue came in ~240bps higher YoY to $37.9 million ("mm"), whereas total recurring contract value ("TRCV") came into $147.7mm, a ~100bps decrease over the year, however the TRCV growth rate was c.300bps ahead of Q1 FY22. The downside in TRCV was attributed to the company's strategy to shift the revenue mix towards digital core solutions and discontinuing various non-core segments. Meanwhile, OPEX widened by 665bps YoY to ~$25.8mm reducing operating income by a similar amount to $11.5mm. This is despite non-cash expenditures decreasing across the period, and a slight loss of leverage at the SG&A line. As seen in Exhibit 1, NRC's quarterly cash flow and free cash flow ("FCF") trends have remained in cyclical fashion from FY15 to date. The company converted $8.5mm of FCF from the quarter, ~$2.5mm net of dividends, whereas TTM FCF yields have remained steady at ~300bps on a sequential basis, as observed. These are attractive numbers in my estimation, and serve NRC well in terms of fundamental momentum when looking ahead. Definitely a bullish point of consideration. Exhibit 1. Sequential FCF trends have remained in situ with steady aggregate growth across the FY15'-Q2 FY22' period. Whilst absolute FCF and FCF yields are pulling back to range this is accompanied by stellar return on investment [discussed below]. Note: All figures in $mm or [%]. Free cash flow calculated as [NOPAT - investments]. FCF net of dividends the same less dividend payout. FCF yield calculated as a function of enterprise value on a TTM basis. (Image: HB Insights. Data: HB Insights, NRC SEC filings) Return on investment a major standout Certainly a key feature in the NRC investment debate is the company's ongoing return on its invested capital ("ROIC"). Here I wanted to see how much net operating profit after tax ("NOPAT") the company generated from the previous period's invested capital. As seen in Exhibit 2, whilst ongoing invested capital has stretched up from FY18 lows, quarterly ROIC has pulled back to FY18 ranges. Note, however, this is still a large print on absolute terms, with Q2 FY22 ROIC pulling in to 6.9% – in-line with the same time last year. These trends are consistent with TTM recordings too, with the company realizing a 37.4% TTM return on its invested capital, as seen below. Exhibit 2. Return on investment trends continue to remain favourable for NRC. TTM ROIC comfortably outpaces the WACC hurdle of 7.75% by 4.8 turns These trends easily offset any decline in FCF and FCF yields as noted in the section above Note: All figures in $mm or [%]. Return on invested capital a function of NOPAT and invested capital. All figures are calculated with GAAP earnings with no reconciliations. (Image: HB Insights. Data: HB Insights, NRC SEC Filings) In addition, the pullback in the NRC share price has resulted in an asymmetrical value proposition. As seen in the chart below, in buying NRC, we are receiving FY22 levels of TTM ROIC at FY18' market capitalization. With the latest curl up of ROIC trends this could serve as a solid bedrock for a NRC's market cap to re-rate to the upside.

Aug 23

National Research declares $0.24 dividend

National Research (NASDAQ:NRC) declares $0.24/share quarterly dividend, in line with previous. Forward yield 2.69% Payable Oct. 14; for shareholders of record Sept. 30; ex-div Sept. 29. See NRC Dividend Scorecard, Yield Chart, & Dividend Growth.

Shareholder Returns

NRCUS HealthcareUS Market
7D-1.6%-3.4%-5.2%
1Y-13.1%6.1%-23.1%

Return vs Industry: NRC underperformed the US Healthcare industry which returned 7.4% over the past year.

Return vs Market: NRC exceeded the US Market which returned -21.6% over the past year.

Price Volatility

Is NRC's price volatile compared to industry and market?
NRC volatility
NRC Average Weekly Movement4.1%
Healthcare Industry Average Movement8.2%
Market Average Movement6.9%
10% most volatile stocks in US Market15.9%
10% least volatile stocks in US Market2.8%

Stable Share Price: NRC is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: NRC's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
1981511Mike Hayshttps://nrchealth.com

National Research Corporation provides analytics and insights that facilitate measurement and enhancement of the patient and employee experience in the United States and Canada. Its portfolio of subscription-based solutions provides actionable information and analysis to healthcare organizations across a range of mission-critical, constituent-related elements, including patient experience, service recovery, care transitions, health risk assessments, employee engagement, reputation management, and brand loyalty. The company also offers market insights solutions that allow the tracking of awareness, perception, and consistency of healthcare brands; assessment of competitive differentiators; and enhanced segmentation tools to evaluate needs, wants, and behaviors of communities through real-time competitive assessments and enhanced segmentation tools.

National Research Corporation Fundamentals Summary

How do National Research's earnings and revenue compare to its market cap?
NRC fundamental statistics
Market CapUS$971.36m
Earnings (TTM)US$36.13m
Revenue (TTM)US$151.80m

26.9x

P/E Ratio

6.4x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
NRC income statement (TTM)
RevenueUS$151.80m
Cost of RevenueUS$56.41m
Gross ProfitUS$95.39m
Other ExpensesUS$59.25m
EarningsUS$36.13m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

Nov 01, 2022

Earnings per share (EPS)1.46
Gross Margin62.84%
Net Profit Margin23.80%
Debt/Equity Ratio35.6%

How did NRC perform over the long term?

See historical performance and comparison

Dividends

2.4%

Current Dividend Yield

50%

Payout Ratio

Does NRC pay a reliable dividends?

See NRC dividend history and benchmarks
When do you need to buy NRC by to receive an upcoming dividend?
National Research dividend dates
Ex Dividend DateSep 29 2022
Dividend Pay DateOct 14 2022
Days until Ex dividend4 days
Days until Dividend pay date19 days

Does NRC pay a reliable dividends?

See NRC dividend history and benchmarks