Please ensure Javascript is enabled for purposes of website accessibility

Why Mednax Stock Is Plunging Today

By Prosper Junior Bakiny - Feb 18, 2021 at 11:28AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company released its earnings report for the fourth quarter.

What happened

Healthcare services provider Mednax (MD 2.50%) reported its fourth-quarter and full-year financial results before the market opened on Thursday, and investors were not pleased with the company's update. Mednax's shares are tumbling today as a result and were down by 24.6% as of 12:01 p.m. EST.

So what

Last year, the pandemic had a significant impact on Mednax's business as stay-at-home orders led to a decrease in patient volume. The effect of the outbreak on the company's financial results was evident in its fourth quarter that ended on Dec. 31. Mednax's net revenue for the quarter was $417 million, representing a decrease of a little more than 9% year over year. The company's top line also came up short of the $459.5 million investors were expecting on average.

Five downward-pointing arrows on a blackboard

Image source: Getty Images.

On the bottom line, Mednax reported an adjusted net income of $21 million -- or $0.25 on a per-share basis, compared with an adjusted net income of $37.1 million and adjusted earnings per share (EPS) of $0.45 it recorded during the year-ago period. The company's bottom line also came up short; on average, analysts had predicted that its adjusted EPS would be $0.36. Mednax's revenue for its full fiscal year 2020 decreased by roughly 2.5% year over year to $1.7 billion, while its adjusted EPS dropped by 32.1% year over year to $0.95.

Now what

Mednax will likely continue dealing with significant headwinds for the duration of the pandemic, but once these challenges subside, management is confident that the company will be able to rebound. However, I'd caution against investing in this healthcare stock until it shows consistently strong financial results, which may or may not happen while we are still dealing with the fallout of the outbreak. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

MEDNAX, Inc. Stock Quote
$22.52 (2.50%) $0.55

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/06/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.