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R1 RCM's (RCM) CEO Joseph Flanagan on Q4 2017 Results - Earnings Call Transcript

Mar. 09, 2018 12:40 PM ETR1 RCM Inc. (RCM)2 Comments
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R1 RCM Inc. (NASDAQ:RCM) Q4 2017 Results Earnings Conference Call March 9, 2018 8:00 AM ET


Atif Rahim - Senior Vice President, Investor Relations

Joseph Flanagan - President and CEO

Christopher Ricaurte - CFO and Treasurer


Charles Rhyee - Cowen and Company

Matthew Gillmor - Robert Baird


Good morning. My name is Lisa, and I will be your conference operator today. At this time, I would like to welcome everyone to the R1 RCM Fourth Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. [Operator Instructions] Thank you.

Atif Rahim, Senior Vice President of Investor Relations, you may begin your conference.

Atif Rahim

Thank you, operator. Good morning, everyone, and welcome to the call. We'll start with prepared remarks by Joe Flanagan, R1's President and CEO; and Chris Ricaurte, CFO and Treasurer. We'll then turn it over to Q&A.

Today's conference call is being recorded. And as a reminder, certain statements made on this conference call may be considered forward-looking statements pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. In particular, any statements about our future growth, plans and performance, including statements about our forecast for 2018, are forward-looking statements. These statements are often identified by the use of words such as anticipate, believe, estimate, expect, intend, design, may, plan, project, would and similar expressions or variations.

The forward-looking statements made on today's call are based on R1's current expectations and projections about our future events as of today only and should not be relied upon as representing the company's views as of any subsequent date. Subsequent events and developments, including actual results or changes in our assumptions, may cause our views to change. While we may

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Comments (2)

Mr Investor profile picture
Please note that, at least so far, any R1/RCM discussion has been on the Yahoo Finance "Conversations" board, so please go there for info and discussion. Hope to eventually get some discussion going here, too, as RCM appears on more investors' radar screens. Thanks.
Mr Investor profile picture
Wow, R1 just keeps rolling along...

On Monday, Cowen raised their price target on RCM from $5 to $10. Then on Tuesday, Cantor initiated coverage with a target of $9. Baird is the holdout, at only $7, as they prefer to wait for evidence that R1 can sign new customers. But by taking such an approach, I believe they are undervaluing the dramatic stock price increase underway from likewise dramatic increases in scope for Ascension and Intermountain, as well as the huge and accretive Intermedix acquisition. As I write this, RCM is already $7.75/shr.

I believe there is a realistic path to $20/shr: $10 from the continued onboarding of Ascension and Intermountain business already signed to long-term contracts, + $5 if Providence St Joe merges w/ Ascension (as discussed in the WSJ article from late last year), + $5 from new customers (new = non-Ascension nor Intermountain). That last $5 piece can explode higher if R1 has good success signing new customers---$5 assumes merely "ok" success.

Finally, a piece I have left out is a compounding effect that a move from off investors' radars to on can have. R1 is a turn-around story, after-all, that I think is morphing into a growth story. So, first, more investors have to come back to the name or discover it in the first place, then others can jump in if/when R1 starts adding new customers. This increased demand for the stock is in some part incremental to the demand created by the improving fundamentals. IOW, the market for the stock can add to stock prices gains. Very hard for me to quantify that, however, and when combined with all the other positives, says it's ok to leave that out as icing on the cake.
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