FORT WORTH, Texas—Q Global Capital Management, L.P., a significant shareholder of ModivCare Inc (NASDAQ:MODV), increased its stake in the company with recent stock purchases totaling approximately $800,863. The transactions occurred over three consecutive days, from December 4 to December 6, 2024. The investment comes as ModivCare's stock trades near $18.07, having declined nearly 59% year-to-date. According to InvestingPro analysis, the stock appears undervalued at current levels.
The firm acquired a total of 45,465 shares of ModivCare common stock. The purchases were made at prices ranging from $17.57 to $17.74 per share. Following these transactions, Q Global Capital Management's total holdings in ModivCare rose to 1,967,098 shares. With a market capitalization of $258 million, ModivCare faces some financial challenges, including a significant debt burden and cash burn rate, as highlighted by InvestingPro's comprehensive analysis.
These transactions underscore Q Global Capital Management's continued investment interest in ModivCare, a company known for its transportation services. The purchases were executed through multiple trades, as detailed in the recent SEC filing.
The filing also highlights the indirect involvement of Q Global Advisors, LLC, Renegade Swish, LLC, and Geoffrey P. Raynor, who are associated with Q Global Capital Management. These entities, however, have disclaimed beneficial ownership of the shares, except to the extent of any indirect pecuniary interest.
In other recent news, ModivCare Inc. reported steady third-quarter earnings. The company posted revenue of $702 million and an adjusted EBITDA of $43 million, which met market expectations. Despite these solid figures, ModivCare experienced a net loss of $27 million and has revised its adjusted EBITDA forecast for 2024 to between $170 million and $180 million.
Recent developments show a 5% growth in ModivCare's Personal Care Services (PCS) segment and improvements in the Non-Emergency Medical (TASE:PMCN) Transportation (NEMT) division. The company also anticipates a 10% increase in adjusted EBITDA for 2025, citing membership growth and new contracts as the main drivers.
However, ModivCare faces challenges such as Medicaid redeterminations affecting NEMT membership and difficulties in the Medicare Advantage market. Despite these hurdles, the company is actively managing a contract receivable balance of $110 million and working on amending its credit agreement. As per analyst notes, ModivCare's strategic positioning and operational efficiency are key to navigating these complexities.
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