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Performant Financial: Good Progress On Business Model Transition Despite Headwinds


  • Discussing fourth quarter and full-year 2021 results as well as progress on the company's ongoing business model transition.
  • New focus on healthcare segment has experienced some hiccups as COVID-19 continues to impact hospital utilization rates.
  • Last year's equity offering and subsequent debt refinancing have greatly improved the company's capital structure and liquidity.
  • With near-term debt maturities having been addressed, a vastly-improved balance sheet and sufficient liquidity, management should be able to focus on growing the new core business going forward.
  • That said, with negative EBITDA currently expected for the first half of 2022 and COVID-19 still representing a major impact, there appears to be no need to hurry for investors to open new or add to existing positions.
Nahaufnahme von einer Krankenversicherung Formular

courtneyk/E+ via Getty Images

Thirteen months ago, I praised Performant Financial's (NASDAQ:PFMT) management for its decision to abandon the company's legacy student loan recovery business and focus on the rapidly growing healthcare segment.

Unfortunately, the performance of the new core business has also been impacted

This article was written by

Henrik Alex profile picture

I am mostly a trader engaging in both long and short bets intraday and occasionally over the short- to medium term. My historical focus has been mostly on tech stocks but over the past couple of years I have also started broad coverage of the offshore drilling and supply industry as well as the shipping industry in general (tankers, containers, drybulk). In addition, I am having a close eye on the still nascent fuel cell industry.

I am located in Germany and have worked quite some time as an auditor for PricewaterhouseCoopers before becoming a daytrader almost 20 years ago. During this time, I managed to successfully maneuver the burst of the dotcom bubble and the aftermath of the world trade center attacks as well as the subprime crisis.

Despite not being a native speaker, I always try to deliver high quality research to followers and the entire Seeking Alpha community.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (5)

Thanks for write up! Betting door closes soon, lots of catalyst waiting ahead for this company. The Cotiviti protest seems to be dismissed. This and the OIG contracts alone are ~14mil rev for next year (no impact this year). Tack on potential backlog of COVID-19 claims, implementations maturing, less COVID impact... The negative EBITDA just shows the amount of ramp-up that is occurring. Public HHS data shows that YoY non-COVID hospitalizations have been improving and were better through 21' despite omicron compared to 20'. Personally I think management is low-balling guidance for this year after what happened with their first recent guidance last year.
bazooooka profile picture
Might get interesting if it swoons more
Jeremy Blum profile picture
I agree, too early to get back in, but worth watching.
bazooooka profile picture
@Jeremy Blum I pulled the trigger in the low twos a month back and cashed a chunk in today and will let the free shares roll.
SimpleTrader profile picture
Nice. Thanks
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