What happened

Shares of MultiPlan Corporation (MPLN 1.71%), a healthcare data analytics and cost management solutions provider, fell 11.1% on Tuesday. The stock opened at $5.42, then dropped to a low of $4.87 in the mid-morning. MultiPlan has a 52-week high of $8.26 and a 52-week low of $3.25. The stock is still up more than 12% so far this year.

So what

An underwhelming neutral rating and a price target of $6.50 by Goldman Sachs wouldn't seem like a big blow, but it was enough to drop MultiPlan's shares, at least for the day. The company, which went public via a special purpose acquisition company (SPAC) merger in 2020, had its best year yet in 2021 with $1.12 billion in revenue, $838.3 million in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), along with $102.8 million in net income.

The company's guidance, reiterated during its first-quarter report on May 10, said it expects full-year revenue this year between $1.16 billion and $1.2 billion and adjusted EBITDA of $850 million to $875 million. That represents a gain of 3.5% to 7.1% in annual revenue and an increase of adjusted EBITDA between 1.3% and 4%.

Investors may also be concerned about the lingering effect of various COVID variants on the company's bottom line, as the company cited an increase of COVID claims in the first quarter. While revenue in the first quarter was $298 million, up 16.9%, net income was $44 million, down 4.1% from the same period last year. The company attributed as much as a $3 million to $5 million impact of COVID on quarterly revenue and an impact of $2 million to $4 million on its adjusted EBITDA.

Now what

An analyst's opinion isn't likely to weigh down the healthcare stock for long. Investors will wait to see the impact of inflation and whether COVID continues to affect the company's bottom line when it releases its second-quarter report next month. MultiPlan faces a lot of competition in the healthcare technology solutions space, but it can point to a solid base of loyal customers, with an average retention period of 25 years or more with its top customers.