Patient Home Monitoring (PHM:TSXV) released yet another record quarter in respect to its revenue and profits on April 9th.
Patient Home Monitoring delivers on Revenue as share price soars
Patient Home Monitoring has never minced words about its profitability, beginning every press release for many months now, with the description of being a profitable, acquisition-oriented company.
It has followed through on both of these fronts as its share price performance has now put together one of the more epic rises, in respect to its length, in TSX Venture history.
While many issuers on the TSX Venture have put together far more impressive rises from a percentage point increase, not to take anything away from PHM’s approximate 800% YoY increase, few have risen so systematically for a period of 11 months without a significant pullback.
Since hitting a 52-week low of $0.22 per share on May 13, 2014, just 11 short months ago, the stock has increased nearly 8-fold to a new 52-week high of $1.72, making it one of the largest (by market cap) companies on the TSX Venture.
PHM’s market cap was flirting with $400 million Friday morning.
Only Storm Resources (SRX:TRSXV,) and its market cap of more than half a billion, is larger to my knowledge. POET Technologies is about 60 million behind PHM’s approximate $395 million market cap with a $335 million approximate market cap.
PHM – 1 Year Chart
Patient Home Monitoring outperforms quarterly revenue and profit
For all the talk about Patient Home Monitoring, it has delivered by outperforming on its quarterly revenue and profits time and again.
Its fiscal year 2015 second quarter revenues and profits were no different.
Patient Home Monitoring Revenue vs. Profit
The company reported total quarterly revenues exceeded $13,000,000 on April 9th for Q2 2015; an increase of 28% from the previous quarter and 255% from the quarter a year ago. And that,
“March 2015 revenues exceeded $5,000,000, translating to an annualized revenue run rate in excess of $60,000,000.”
Click here to read more.
Make sure to not confuse revenue with earnings. Revenue is simply a company’s total sales or gross income; it is commonly referred to as a company’s “top line”.
Earnings are a much more important metric when attempting to value a company as it means net-income, pure and simple.
Patient Home Monitoring reported that,
“Net profit before stock-based compensation(2) exceeded $1,600,000; an increase of 23.5% from the previous quarter.”
(2) Net Profit does not include stock based compensation or change in the IFRS Fair Value of options and warrants expense.
The famed price to earnings ratio is often what market pundits and fund managers work with to quickly determine whether or not the S&P is fairly valued or not.
The S&P 500 PE Ratio was up 0.48% Friday April 10th, to 20.54 as equities rallied.
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The companies these leaders run today are also revealed in this one of kind rolodex of some of the top entrepreneurs and business minds in North America’s public markets.
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Patient Home Monitoring did not report earnings per share in its press release on April 9th.
This was a number it had focused on and reported in the past.
In the company’s May 21, 2014, press release PHM announced record revenue and profits for the second quarter of 2014. Its Chairman, and CEO at the time, Michael Dalsin, commented that, “We have seen another quarter with high quarterly EPS growth of 205% in part as a result of acquisition this quarter.”
The EPS metric also made it into the title of that May 21st press release, which read: Patient Home Monitoring Announces Record Revenues and Profits, 205% Increase in Earnings Per Share; Cross Selling and Organic Revenue Growth Continues to Improve. Below is a short excerpt from that press release.
“(1) EPS and Net Profit does not include IFRS Fair Value of options, warrants expense and stock based compensation. EPS growth was calculated using the following information:
source:
http://finance.yahoo.com/news/patient-home-monitoring-announces-record-130000500.html
Back to Q2 2015…
Despite PHM’s total quarterly revenues exceeding $13,000,000; an increase of 28% from the previous quarter and 255% from the quarter a year ago, its net profit before stock-based compensation(2) exceeded $1,600,000; an increase of 23.5% from the previous quarter.
Top-line revenue growth is paramount, as ultimately that flow of revenue is where earnings come from, but on its own can sometimes be misleading when bottom-line growth is not taken into context.
At the end of the day, profits or earnings are the key metric.
PHM reported an annualized adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) run rate in excess of $11,400,000. Its market cap was more than 30 times this figure in Friday afternoon trading.
The EV/EBITDA ratio can sometimes be more helpful in valuing a company in comparison to the P/E ratio. The EV/EBITDA ratio should not be compared to a company’s P/E ratio.
The EV/EBITDA ratio is calculated as enterprise value divided by its EBITDA.
At 2:21 PM EST, PHM’s enterprise value was approximately C$395.21 million. By dividing PHM’s Annualized Adjusted EBITDA run rate, reported in yesterday’s press release at in excess of $11,400,000, PHM’s approximate EV/EBITDA ratio today is 34.66.
This is up from yesterday’s 29.43 EV/EBITDA ratio highlighted on CapitalCube.com. Of the 10 peers Capital Cube compared PHM to, the peer medium average EV/EBITDA was 16.73. Click the below link to get more fundamental analysis from CapitalCube.com.
Patient Home Monitoring is the hottest healthcare-related stock on the TSX Venture. Its ability to continue to expand and add revenue to its fold via acquisitions has been something to witness. As the company continues to grow its business investors may be more and more interested in the company’s bottom line and how much revenue it is able to retain in the form of net profits.
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