CRH Medical Corporation (TSE:CRH) said its revenues will fall about 9%, with a 14% decline in its EBITDA
SmallCapPower | July 20, 2017: CRH Medical Corporation (TSX: CRH) Monday commented on the estimated impact of the Center for Medicare and Medicaid Services (CMS) proposed fee schedule for 2018, which was announced on July 13, 2017.
CRH Medical has analyzed the impact of the new codes on its business and has determined that if the new codes were implemented today as currently proposed, total revenues will decrease by ~8.5% and total adjusted EBITDA would decrease by ~13.5% (margin will reduce to ~47% from ~53%). Following the news, CRH Medical Corp.’s shares declined 10.5% to $4.18 on July 18, 2017.
CRH Medical continues to witness hectic insider selling activity. On June 28, one of the Company’s Director David Johnson sold 30,000 shares of the firm’s stock (at an average price of $5.67). Mr. Johnson and CEO Edward Wright have sold large stakes of CRH stock over the past few months. This unusual insider trading along with the impact of new code implementation has dragged down the Company’s stock price by 66% in past three months.
In terms of valuation, CRH Medical Corporation currently trades at Price to TTM Sales of 3.55x, Price to Book Value of 4.91x and forward PE of 22.00x.
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