ModivCare Inc

ModivCare Inc. (NASDAQ: MODV) is a technology-enabled healthcare services company that provides a suite of integrated supportive care solutions for public and private payors and their members. The Company provides non-emergency medical transportation (NEMT), personal care, and remote patient monitoring, (RPM) solutions. The Company’s segments include NEMT, Personal Care, RPM and Corporate and Other.

Recent Financial and Business Updates:

• Key Highlights for the Second Quarter of 2023:
• Service revenue experienced growth, reaching USD 699.1 million, marking an 11.3% rise compared to the USD 628.2 million reported in the second quarter of 2022.
• A net loss of USD 190.9 million was incurred, equivalent to USD 13.47 per diluted common share. This loss was primarily attributed to a goodwill impairment of USD 183.1 million.
• Adjusted EBITDA amounted to USD 52.4 million, with adjusted net income standing at USD 20.8 million. Additionally, the adjusted EPS reached USD 1.47 per diluted common share.
• Operating activities utilized USD 108.2 million in cash during the quarter, accompanied by capital expenditures amounting to USD 8.9 million.
• Contract payables reduced by USD 78.5 million, resulting in a balance of USD 109.1 million, while contract receivables increased by USD 17.4 million, reaching USD 119.8 million. Consequently, net contract receivables totaled USD 10.7 million as of June 30, 2023.
• As of June 30, 2023, a total of USD 126.5 million was drawn from the available USD 325.0 million revolving credit facility.

Technical Observation (on the daily chart)

The price of MODV stock has shown a consistent downward trend since making its 52-week high on August 25, 2022, with a correction of approximately 66.01%. The RSI (14 period) momentum indicator is in a uptrend with currently at a value of 49.43, with expectations of some consolidation. Moreover, the price is currently positioned between both the 21-day SMA and 50-day SMA trend-following indicators, which may act as dynamic short-term support and resistance levels respectively.

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As per the above-mentioned price action, key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Speculative Buy’ rating has been given to ModivCare Inc. (NASDAQ: MODV) at the closing market price of USD 41.15 as of August 18, 2023.

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

How to Read the Charts?

The Yellow colour line reflects the 21-period simple moving average (SMA) while the blue line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Orange colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Red and green colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps in easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices. 

The reference date for all price data, currency, technical indicators, support, and resistance levels is August 18, 2023. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.

Disclaimer

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