CareRx Doubles Revenue, Increases EBITDA by 86% in Fourth Quarter

Edward Kim  |

Image source: CareRx investor presentation, Dec 2021

CareRx Corp. (Toronto: CRRX) posted revenue from continuing operations of C$96.9 million (US$76.8 million) in the fourth quarter ended Dec. 31, 2021, up 109% from the same period the prior year.

Canada's largest seniors care pharmacy provider reported adjusted EBITDA from continuing operations increased to C$7.6 million (US$6.0 million) in Q4 2021, up 86% from the same period in 2020.

Net loss from continuing operations increased to C$4.4 million (US$3.5 million), compared to a loss of C$3.0 million in the prior year's quarter.

For the full year 2021, CareRx reported revenue from continuing operations of C$262.6 million (US$208.2 million), up 62% over 2020.

Adjusted EBITDA from continuing operations came in at C$22.9 million (US$18.2 million) for the year, up 79%.

Net loss from continuing operations was C$22.7 million (US$18.0 million) for 2021, compared to a net loss of C$18.3 million in 2020.

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"The fourth quarter was a strong finish to an exceptional year that saw our bed count and revenue double as a result of the successful execution of our growth strategy," said David Murphy, President and CEO of CareRx.

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Image source: CareRx investor presentation, Dec 2021

Investment thesis

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CareRx stock is fallen over 25% from its August 2021 highs. The discount and current market cap of only C$225 million (US$178 million) feels unwarranted given the company's growth trajectory, market share and successful integration of multiple recent acquisitions.

  • Strong revenue and EBITDA growth
  • Company has 23% of the seniors housing beds in Canada, with the market expected to more than double over the next 15 years.
  • Company has made three acquisitions in the past two years, adding nearly 25,000 beds at accretive purchase multiples.
  • CareRx recently secured extensions with its two largest customers, representing approximately 15,000 total beds serviced, for an average of 5.5 years from the end of 2021.
  • The Ontario Ministry of Health recently postponed previously scheduled changes to long-term care pharmacy funding for a further year.
  • The company projects 130,000 beds and C$500 million in revenue by 2024.


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