On Monday, Deutsche Bank updated its assessment of TruBridge Inc (NASDAQ:TBRG), reducing the price target from $12.00 to $11.00, yet maintaining a Hold rating on the stock. The revision follows TruBridge's announcement of its first quarter results for fiscal year 2024 and updated revenue guidance for the full year.
The company has lowered its total revenue forecast from the initial range of $340 million - $350 million to a new range of $330 million - $340 million. This updated guidance falls short of the consensus estimate of $344 million and suggests a flat to 3% year-over-year growth.
For the second quarter, TruBridge's revenue guidance was set below the market expectation of $84.5 million. The guidance midpoint of $82 million indicates a year-over-year decline of 3.1%. Despite this, the company has reaffirmed its full-year adjusted EBITDA to be within the range of $45 million to $50 million, which is in line with the Street's projection of $46.3 million.
Still, the second-quarter adjusted EBITDA is expected to be between $8.0 million and $10.0 million, hinting that profitability is likely to improve in the second half of the year along with revenue.
The company anticipates that recent deal wins in its Revenue Cycle Management (RCM) and Electronic Health Record (EHR) businesses will introduce additional complexity to the sales pipeline, prompting the adjustment to the full-year revenue guidance.
The report also noted that the margin pressure felt in the first half of the year reflects the ramping up of global capacity, which began in the first quarter, and the integration costs associated with the acquisition of Viewgol. It was highlighted that rebranding costs have been excluded from the adjusted EBITDA figures.
InvestingPro Insights
Following the recent updates from TruBridge Inc (NASDAQ:TBRG), investors are keenly observing the company's performance metrics. According to real-time data from InvestingPro, TruBridge's market capitalization stands at $125.78 million, with a Price/Book ratio of 0.68 as of the last twelve months leading up to Q1 2024.
Despite the lowered revenue forecast, the company has seen a significant return over the last week, with a price total return of 8.14%. This could suggest a market reaction to the company's strategic moves or other external factors.
InvestingPro Tips highlight that TruBridge operates with a significant debt burden and is not currently paying dividends to shareholders. Still, analysts predict that the company will be profitable this year, which aligns with TruBridge's own forecasts of improved profitability in the second half of the year. With the company trading at a high EBITDA valuation multiple and the expectation of net income growth, these factors may be critical for investors considering the stock's potential.
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