NasdaqGS:RCM

Stock Analysis Report

Executive Summary

R1 RCM Inc. provides revenue cycle management (RCM) for healthcare providers in the United States.

Snowflake

High growth potential and slightly overvalued.


Similar Companies

Share Price & News

How has R1 RCM's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: RCM's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

1.8%

RCM

5.3%

US Healthcare

0.5%

US Market


1 Year Return

41.1%

RCM

4.4%

US Healthcare

16.1%

US Market

Return vs Industry: RCM exceeded the US Healthcare industry which returned 4.4% over the past year.

Return vs Market: RCM exceeded the US Market which returned 16.1% over the past year.


Shareholder returns

RCMIndustryMarket
7 Day1.8%5.3%0.5%
30 Day22.5%12.3%3.9%
90 Day7.5%15.7%6.6%
1 Year41.1%41.1%6.2%4.4%18.7%16.1%
3 Year462.3%462.3%51.9%45.1%47.2%37.7%
5 Year53.9%53.9%69.6%58.0%61.5%43.7%

Price Volatility Vs. Market

How volatile is R1 RCM's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is R1 RCM undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: RCM ($12.54) is trading below our estimate of fair value ($67.35)

Significantly Below Fair Value: RCM is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: RCM is unprofitable, so we can't compare its PE Ratio to the Healthcare industry average.

PE vs Market: RCM is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate RCM's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: RCM is overvalued based on its PB Ratio (95.6x) compared to the US Healthcare industry average (2.6x).


Next Steps

Future Growth

How is R1 RCM forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

46.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RCM is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (2.7%).

Earnings vs Market: RCM is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: RCM's is expected to become profitable in the next 3 years.

Revenue vs Market: RCM's revenue (9.4% per year) is forecast to grow faster than the US market (7.3% per year).

High Growth Revenue: RCM's revenue (9.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: RCM's Return on Equity is forecast to be high in 3 years time (34%)


Next Steps

Past Performance

How has R1 RCM performed over the past 5 years?

-2.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RCM has large one-off items impacting its financial results.

Growing Profit Margin: RCM is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: RCM is unprofitable, and losses have increased over the past 5 years at a rate of -2% per year.

Accelerating Growth: Unable to compare RCM's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: RCM is unprofitable, making it difficult to compare its past year earnings growth to the Healthcare industry (9.7%).


Return on Equity

High ROE: RCM has a negative Return on Equity (-0.63%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is R1 RCM's financial position?


Financial Position Analysis

Short Term Liabilities: RCM's short term assets ($190.1M) do not cover its short term liabilities ($203.1M)

Long Term Liabilities: RCM's short term assets ($190.1M) do not cover its long term liabilities (459.6M)


Debt to Equity History and Analysis

Debt Level: RCM's debt to equity ratio (154.2%) is considered high.

Reducing Debt: Insufficient data to determine if RCM's debt to equity ratio has reduced over the past 5 years.


Balance Sheet

Inventory Level: RCM has a high level of physical assets or inventory.

Debt Coverage by Assets: RCM's debt is not covered by short term assets (assets are 0.5x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable RCM has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: RCM is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 112.4% per year.


Next Steps

Dividend

What is R1 RCM's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

company0%marketbottom25%1.4%markettop25%3.7%industryaverage1.5%forecastin3Years0%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate RCM's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate RCM's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if RCM's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if RCM's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: RCM is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of RCM's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of R1 RCM's salary, the management and board of directors tenure and is there insider trading?

2.3yrs

Average management tenure


CEO

Joe Flanagan (48yo)

3.5yrs

Tenure

US$4,575,994

Compensation

Mr. Joseph Gerard Flanagan, also known as Joe, has been the Chief Executive Officer and President of R1 RCM Inc. (Former Name: Accretive Health, Inc.) since May 26, 2016 and April 21, 2016 respectively. Mr ...


CEO Compensation Analysis

Compensation vs Market: Joe's total compensation ($USD4.58M) is about average for companies of similar size in the US market ($USD3.85M).

Compensation vs Earnings: Joe's compensation has been consistent with company performance over the past year.


Management Age and Tenure

2.3yrs

Average Tenure

49yo

Average Age

Experienced Management: RCM's management team is considered experienced (2.3 years average tenure).


Board Age and Tenure

3.1yrs

Average Tenure

64yo

Average Age

Experienced Board: RCM's board of directors are considered experienced (3.1 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 3.8%.


Management Team

  • Joe Flanagan (48yo)

    President

    • Tenure: 3.5yrs
    • Compensation: US$4.58m
  • Atif Rahim

    Senior Vice President of Investor Relations & Business Development

    • Tenure: 0yrs
  • Gary Long (49yo)

    Executive VP & Chief Commercial Officer

    • Tenure: 2.3yrs
    • Compensation: US$1.09m
  • Rick Evans (51yo)

    Senior VP

    • Tenure: 0.2yrs
  • Corey Perman

    Executive Vice President of Compliance & Risk

    • Tenure: 3.3yrs
  • Doug Berkson

    Senior Vice President

    • Tenure: 3.3yrs
  • Sean Radcliffe

    Executive VP

    • Tenure: 2.8yrs
  • Wes Arnett

    Executive Vice President of Deployment

    • Tenure: 2.3yrs
  • Logan Johnston

    Executive Vice President of Central Operations

    • Tenure: 2.3yrs
  • Kate Sanderson

    Executive VP & Chief Human Resources Officer

    • Tenure: 1yrs

Board Members

  • Neal Moszkowski (53yo)

    Independent Director

    • Tenure: 3.8yrs
  • Alex Mandl (76yo)

    Lead Director

    • Tenure: 1.7yrs
    • Compensation: US$220.00k
  • Jack Henneman (57yo)

    Independent Director

    • Tenure: 3.8yrs
    • Compensation: US$60.00k
  • Jill Smith (61yo)

    Independent Director

    • Tenure: 0.6yrs
  • Anthony Tersigni (69yo)

    Director

    • Tenure: 0.3yrs
  • Anthony Speranzo (70yo)

    Director

    • Tenure: 3.8yrs
  • Ian Sacks (48yo)

    Independent Director

    • Tenure: 3.8yrs
  • Joe Flanagan (48yo)

    President

    • Tenure: 3.5yrs
    • Compensation: US$4.58m
  • Michael Feiner (77yo)

    Independent Director

    • Tenure: 2.7yrs
    • Compensation: US$190.00k
  • Bert Zimmerli (67yo)

    Director

    • Tenure: 1.7yrs

Company Information

R1 RCM Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: R1 RCM Inc.
  • Ticker: RCM
  • Exchange: NasdaqGS
  • Founded: 2003
  • Industry: Health Care Services
  • Sector: Healthcare
  • Market Cap: US$1.415b
  • Shares outstanding: 112.86m
  • Website: https://www.r1rcm.com

Number of Employees


Location

  • R1 RCM Inc.
  • 401 North Michigan Avenue
  • Suite 2700
  • Chicago
  • Illinois
  • 60611
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
RCMNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDMay 2010
6HLDB (Deutsche Boerse AG)YesCommon StockDEEURMay 2010

Biography

R1 RCM Inc. provides revenue cycle management (RCM) for healthcare providers in the United States. It offers end-to-end RCM services to manage their revenue cycle operations, which encompass patient regist ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/21 00:26
End of Day Share Price2019/11/20 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.