RCM

R1 RCM Inc

Finance/Real Estate, Healthcare


Presented:06/14/2019
Price:$11.60
Cap:$1.28B
Current Price:$14.23
Cap:$6.01B

Presented

Date06/14/2019
Price$11.60
Market Cap$1.28B
Ent Value$1.60B
P/E RatioN/A
Book Value$0.03
Div Yield0%
Shares O/S110.60M
Ave Daily Vol1,013,707
Short Int5.88%

Current

Price$14.23
Market Cap$6.01B
R1 RCM, Inc. engages in the provision of revenue cycle management to healthcare providers. It offers end-to-end, modular revenue cycle, and physician advisory services. The company was founded by Mary Ann Tolan and J. Michael Cline in July 2003 and is headquartered in Chicago, IL.

Publicly traded companies mentioned herein: R1 RCM Inc (RCM)

Highlights

The presenter is short shares of R1 RCM (RCM; fka Accretive Health) due to a “fascinating situation/setup” involving an extreme case of customer concentration risk, as well as the potential for EBITDA to miss Street estimates and “massive” dilution over the next four years. RCM is a provider of revenue cycle management solutions to healthcare providers. RCM’s largest client, Ascension, is also its largest shareholder due to a unique string of events in 2015 that included a takeout offer at 50% below the company’s market value at that time. RCM is attempting to grow an unproven outsourced model over the next few years, and if EBITDA comes in sub-$200MM, and the dilution from the convertible preferred stock and warrants becomes more fully appreciated, there could be up to 50% downside risk for shareholders.

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Idea Discussion

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