Breaking News: Towerbrook Capital Partners to Submit Takeover Bid for R1 RCM Inc. Stock - TD Cowen Maintains Buy Rating with $20.00 Price Target
On Monday, TD Cowen reaffirmed a Buy rating on R1 RCM Inc (NASDAQ: RCM) stock, with a steady price target of $20.00. This announcement comes in the wake of Towerbrook Capital Partners (TCP) revealing their intention to present a takeover bid for R1 RCM, surpassing the previous offer by NMC. The proposed bid from TCP is anticipated to be around $15.00 per share, reflecting a valuation that aligns with recent transactions in the Healthcare IT sector.
R1 RCM's adjusted EBITDA has shown impressive growth, with an estimated CAGR of 21% over three years. Investors may advocate for a valuation that mirrors the company's strong financial performance. The market is buzzing with anticipation over the potential acquisition and the return of former CEO Joe Flanagan if the deal goes through.
Despite recent challenges such as a cyberattack and customer bankruptcy, R1 RCM reported Q1 revenues of $604 million and an adjusted EBITDA of $152 million. The company's updated outlook for 2024 forecasts revenue between $2.6 billion to $2.64 billion and adjusted EBITDA between $625 million to $650 million. Analyst firms have offered mixed ratings, with RBC Capital Markets reiterating an "Outperform" rating, KeyBanc Capital Markets downgrading to "Sector Weight," and Citi Research upgrading to "Buy."
InvestingPro Insights: R1 RCM Inc is at the center of takeover bid speculations, offering a potential buying opportunity for investors. Despite recent price declines, the company's revenue growth and profitability outlook remain positive. Utilize InvestingPro's real-time data and insights to make informed investment decisions and access additional tips using coupon code PRONEWS24 for up to 10% off subscription plans.
In summary, investors should closely monitor developments surrounding R1 RCM's potential acquisition and consider the company's growth trajectory and performance metrics in their investment strategies. Stay informed with InvestingPro for up-to-date analysis and insights on R1 RCM and other investment opportunities.