Gentiva Health Services, Inc. (GTIV) grew revenue in 2009 as it focused on its home health and hospice segments. The company is cheap, with a forward P/E of 11.3.
Company Description
Gentiva Health Services provides home health and hospice services in over 380 communities nationwide every year.
The services include nursing care, physical, occupational and speech therapy, nutrition, hospice services, disease management and wound care.
Gentiva Acquires Hospice Provider in Mississippi
On Mar 8, Gentiva announced it had acquired Heart to Heart Hospice in Mississippi. Heart to Heart had net revenue of $4 million in 2009.
The acquisition is not expected to have a material impact on Gentiva’s 2010 results however it continues Gentiva’s strategy to expand its hospice business.
Gentiva first entered the Mississippi market in 2008 when it acquired Gilbert’s Home Health and Gilbert’s Hospice Care.
Terms of the deal were not disclosed.
Gentiva Surprised by 16.7% in the Fourth Quarter
On Feb 18, Gentiva reported fourth quarter results and surprised on the Zacks Consensus Estimate by 9 cents per share. Earnings per share were 63 cents compared to the consensus of 54 cents.
Revenue rose 16% to $310 million from $267.3 million in the year ago period. It did include 14 weeks of activity compared to 13 weeks in 2008.
The company’s focus on home health and hospice care seemed to pay off in the quarter.
The home health segment saw revenue jump 23% to $235.6 million while the hospice segment grew revenue by 16% to $19.8 million from $17.1 million in the fourth quarter of 2008.
2010 Outlook
Gentiva forecasts earnings per share in the range of $2.57 and $2.67 for the year. The company expects continued strong growth in the Home Health segment.
It also predicts that revenue growth will be mainly driven by organic volume growth and the expansion of the company’s specialty programs.
2010 Zacks Consensus Estimate Trends Higher
In the last 30 days, 3 estimates have moved higher for 2010. The 2010 Zacks Consensus Estimate has risen 2 cents to $2.63 per share during that time which is on the higher end of the company’s guidance range.
Analysts now expect 2010 earnings growth of 20.3%.
Gentiva is expected to report first quarter earnings on Apr 29.
Value Fundamentals
Gentiva Health is a Zacks #1 Rank (strong buy) stock. It has a price-to-book ratio of 1.5 which is under the industry average of 2.3.
The company also has a solid 5-year average return on equity (ROE) of 10.5%.
Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor in charge of the market-beating Zacks Value Trader service.
