FORT WORTH, TX—Q Global Capital Management, L.P., a significant shareholder of ModivCare Inc (NASDAQ:MODV), recently increased its stake in the company with substantial stock purchases. According to a filing with the Securities and Exchange Commission, Q Global Capital acquired a total of 58,191 shares in two separate transactions on November 7, 2024.
The purchases were made at prices ranging from $16.54 to $17.57 per share, amounting to a total investment of $997,053. These transactions reflect Q Global Capital's ongoing interest in ModivCare, a company known for its transportation services.
Following these acquisitions, Q Global Capital now holds 1,812,725 shares of ModivCare stock. The transactions were executed under the management of Q Global Advisors, LLC, and Renegade Swish, LLC, with Geoffrey P. Raynor having an indirect control over these entities. Despite the acquisitions, the firms have disclaimed beneficial ownership except to the extent of any indirect pecuniary interest.
In other recent news, ModivCare reported steady third-quarter results, with revenue reaching $702 million and an adjusted EBITDA of $43 million. The company demonstrated a 5% growth in its Personal Care Services (PCS) segment and improvements in the Non-Emergency Medical (TASE:PMCN) Transportation (NEMT) sector. Despite a net loss of $27 million, ModivCare anticipates a 10% increase in adjusted EBITDA for 2025, driven by membership growth and new contracts. However, the company revised its adjusted EBITDA guidance for 2024 to between $170 million and $180 million. ModivCare is also managing a contract receivable balance of $110 million and is in discussions for a long-term credit facility amendment. These developments come as ModivCare navigates the challenges of market shifts and Medicaid redeterminations, with the company evaluating business segments for potential sale to ensure consistent cash flows and performance.
InvestingPro Insights
Q Global Capital's recent investment in ModivCare Inc (NASDAQ:MODV) comes at a time when the company faces significant financial challenges. According to InvestingPro data, ModivCare's market capitalization stands at $244.54 million, reflecting a substantial decline in its stock price. The company's YTD price total return of -61.17% underscores the steep drop in investor confidence.
Despite these challenges, InvestingPro Tips suggest that net income is expected to grow this year, and analysts predict the company will be profitable. This optimistic outlook might explain Q Global Capital's decision to increase its stake in ModivCare.
However, potential investors should be aware that ModivCare operates with a significant debt burden and is quickly burning through cash. The company's short-term obligations exceed its liquid assets, which could pose liquidity risks in the near term.
For those considering following Q Global Capital's lead, it's worth noting that ModivCare's stock generally trades with high price volatility. This characteristic, combined with the company's current financial position, suggests a high-risk investment profile.
InvestingPro offers 10 additional tips for ModivCare, providing a more comprehensive analysis for investors looking to make informed decisions. These insights could be particularly valuable given the company's complex financial situation and the recent insider buying activity.
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