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AGTI

Agiliti NYSE:AGTI Stock Report

Last Price

US$16.40

Market Cap

US$2.2b

7D

2.7%

1Y

-15.4%

Updated

05 Oct, 2022

Data

Company Financials +
AGTI fundamental analysis
Snowflake Score
Valuation3/6
Future Growth4/6
Past Performance3/6
Financial Health1/6
Dividends0/6

AGTI Stock Overview

Agiliti, Inc., together with its subsidiaries, provides healthcare technology management and service solutions to the healthcare industry in the United States.

Agiliti, Inc. Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Agiliti
Historical stock prices
Current Share PriceUS$16.40
52 Week HighUS$26.34
52 Week LowUS$14.29
Beta1.01
1 Month Change3.08%
3 Month Change-21.19%
1 Year Change-15.38%
3 Year Changen/a
5 Year Change68.38%
Change since IPO68.90%

Recent News & Updates

Sep 18

Agiliti: Mid-Term Growth Drivers Now Tight Following HHS, Guidance Updates

Summary Investors have compressed the Agiliti share price following headwinds outlined in its Health and Human Services agreement. Following the update, guidance has been narrowed from previous estimates. In addition, shares look to be priced fairly by the market which supports a neutral view at present. Net-net I've rated AGTI a hold based on the culmination of factors raised in this report. Investment summary We are neutral on Agiliti, Inc. (AGTI) shares after the company narrowed revenue expectations from its Health and Human Services ("HHS") agreement from previous FY22 guidance. The impact is likely to have a material impact on the stock's ability to re-rate back to the upside. I've noted the market's muted reaction to an otherwise solid set of numbers for Q2 FY22, and after careful analysis of the company's business model and its earnings prospects, believe shares are fairly priced with little upside capture on offer. Net-net, I rate AGTI a hold until the company can demonstrate a replacement in revenue from the HHS agreement overhang. AGTI 6-month price action. See the divergence in long-term trend indicators [bottom window] and price distribution. Data: Refinitiv Eikon Key catalyst – HHS agreement overhang Despite the miss versus consensus at the top line, management reiterated FY22 guidance and this points to several curious factors looking ahead. Firstly, previous guidance baked revenues against a comp of $30–$40mm of Covid-19 revenue from FY21. However, equipment utilization levels actually dropped below pre-Covid levels during the quarter, nullifying this forecast. Management now foresee a $39–$40mm negative impact to revenue from this in FY22. It also assumed revenue from the new HHS agreement would generate $40–$50mm at the top this year. However, AGTI learned during the quarter that certain time and materials work will remain fluid and be deferred until a new HHS contract is awarded. The full impact of this change is expected to be $10–$15mm adjustment to revenue from last year. In addition to the above, management also noted "the rental portion of the business" as the second reason for the variance. Per CFO, Jim Pekarek on the Q2 earnings call: "We have previously described the net COVID impact of higher medical device utilization in 2021 is a $30 million to $40 million full year benefit to revenue. We further define this tailwind as the excess of COVID-driven rental revenue in 2021 over the 2019 pre-COVID baseline utilization for our rental fleet." However, this 'excess tailwind' has certainly wound back with the reduction in Omicron-led demand, presenting AGTI with a $20–$30mm net reduction in revenue from initial guidance. Q2 earnings: Mixed, but not terrible Second quarter earnings were mixed with a 900bps YoY growth in revenue to $724 million ("mm"). Segmentally, the equipment solutions business came in with $107mm [$0.80/share] and grew 48% YoY, with the Sizewise acquisition showing quarterly revenue accretion of ~525bps or $38mm [$0.02/share]. Turnover in the clinical engineering segment grew 300bps YoY to $104mm and tightened up secondary to the lower HHS agreement revenue, particularly as ATGI moves towards longer-term pricing levels associated with ongoing maintenance of its stockpile devices. Meanwhile, revenue from on-site managed $63mm and narrowed by 19 percentage points YoY. The decrease, again, stemmed from the revised pricing as a part of the HHS agreement, and therefore was expected. It bought this down to operating income of $16mm after a 130bps YoY increase in SG&A for the 12 months. However, we note this increase in SG&A included a $21.5mm non-cash amortization expense, as noted in the company's Q2 FY22 10-Q. AGTI capitalizes contract costs that incurred in obtaining new contracts. It books these as investments under 'other long-term assets' on the balance sheet. It then amortizes these over an estimated useful life of 5-years. Total capitalized costs during the 2nd quarter were $17.9mm. Also, there was a $69.5mm non-cash depreciation expense associated with the company's plant, property and equipment (''PP&E'') asset value, and this was recognized in cost of revenue, as noted by the company in the 10-Q. AGTI's depreciation schedule for the 6-month period to Q2 FY22 is seen in Exhibit 1. One positive takeout from the quarter was AGTI's FCF conversion of $13.6mm, although this too remained down on longer-term trends. The realized FCF yield on this comes in at 58bps and 450bps on a TTM basis using the company's latest market capitalization. Meanwhile, TTM return on investment ("ROIC") was 410bps for AGTI, but TTM return on its existing capital/assets was a tight 190bps and neither figures cover the WACC hurdle of 8.4%, which could be a risk to earnings looking ahead in my estimation. Exhibit 1. For the 6-months of December 2021–June 2022, straight-line depreciation of PP&E. AGTI books amortization and depreciation in its SG&A and cost of revenues, respectively.

Jun 14

Agiliti Grows Business But Appears Fully Valued Here

Agiliti went public in April 2021, raising $368 million in gross proceeds in an IPO. The firm provides a range of equipment management and related services to healthcare facilities in the U.S. AGTI has performed well during the pandemic, growing revenue and profits in recent quarters. Based on a generous forward earnings DCF, the stock appears fully valued at around $18.00.

Shareholder Returns

AGTIUS HealthcareUS Market
7D2.7%2.9%1.9%
1Y-15.4%13.9%-18.8%

Return vs Industry: AGTI underperformed the US Healthcare industry which returned 13.6% over the past year.

Return vs Market: AGTI exceeded the US Market which returned -18.2% over the past year.

Price Volatility

Is AGTI's price volatile compared to industry and market?
AGTI volatility
AGTI Average Weekly Movement7.4%
Healthcare Industry Average Movement7.8%
Market Average Movement7.0%
10% most volatile stocks in US Market15.5%
10% least volatile stocks in US Market2.9%

Stable Share Price: AGTI is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: AGTI's weekly volatility (7%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19394,900Tom Leonardhttps://www.agilitihealth.com

Agiliti, Inc., together with its subsidiaries, provides healthcare technology management and service solutions to the healthcare industry in the United States. It offers onsite managed services that are comprehensive programs for the management, reprocessing, and logistics of medical equipment at individual facilities and integrated delivery networks to monitor and adjust equipment quantities and availability to address fluctuations in patient census and acuity. The company also provides clinical engineering services comprising maintenance, repair, and remediation solutions for various types of medical equipment, including general biomedical equipment, diagnostic imaging equipment, and surgical equipment through supplemental and outsourced offerings.

Agiliti, Inc. Fundamentals Summary

How do Agiliti's earnings and revenue compare to its market cap?
AGTI fundamental statistics
Market CapUS$2.18b
Earnings (TTM)US$44.54m
Revenue (TTM)US$1.12b

49.0x

P/E Ratio

1.9x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
AGTI income statement (TTM)
RevenueUS$1.12b
Cost of RevenueUS$675.35m
Gross ProfitUS$445.98m
Other ExpensesUS$401.44m
EarningsUS$44.54m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)0.33
Gross Margin39.77%
Net Profit Margin3.97%
Debt/Equity Ratio114.7%

How did AGTI perform over the long term?

See historical performance and comparison