Medical Transcription Billing Corp (NASDAQ:MTBC) is on the rise again, as new client wins have rejuvenated this healthcare stock. Shares of New Jersey-based Medical Transcription Billing Corp. (NASDAQ: MTBC), currently trading at $1.56, have been on fire recently. Over the past five days, shares are up a staggering 222.92%.
Over the past month, MTBC shares are up 121.43%. And YTD, they are up 113.79%.
So what’s going on with Medical Transcription Billing Corp (NASDAQ:MTBC) ? One answer could be that the company has been trying to transition away from boring, non-sexy fields – medical transcription and billing software – into more high-growth fields like healthcare IT and healthcare business services.
The medical industry is ripe for innovation, and even something as simple as electronic health records (EHRs) is an area where Medical Transcription Billing Corp. is now able to help medical practitioners. Other healthcare IT innovations now being highlighted by MTBC include more of a focus on mobile health (mHealth), perhaps one of the hottest areas in the entire medical space.
But what investors are really excited about is the company’s efforts to go out and sign up more deep-pocketed clients. At the end of April (coinciding with the company’s recent meteoric rise), the company announced that it had signed up two new clients – one in pain management and one in orthopedics – that would account for $1 million in combined revenue starting in 3Q 2017. Best of all, MTBC indicated that this would be recurring revenue rather than just a one-time addition to the bottom line.
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$MTBC 10-Day Chart Below:
On top of that, MTBC also announced a new partnership with Health Compliance Network, a provider of compliance solutions to hospitality and medical groups. This opens up new doors for MTBC to streamline the workflows of medical practitioners, reduce administrative burdens, cut costs and make better decisions (especially when it comes to billing and patient engagement).
Those client wins were largely the catalyst for the stock skyrocketing from $0.44 to the current price of $1.70 on April 28. The question investors have to ask themselves is whether the company is properly valued, or whether there is still more growth yet to come.
In an encouraging sign, Zacks Investment Research recently upgraded MTBC from “Sell” to “Hold.” And if you look at the technical indicators for MTBC, the current signals are bullish. For example, the 50-day moving average for the stock is $0.62 and the 200-day moving average is $0.77. And another technical indicator, the RSI (Relative Strength Indicator) is now 76.87, which is also considered to be a bullish signal.
However, there’s the pesky matter of the company’s latest quarterly earnings, which resulted in a negative $0.40 EPS. The estimate was negative $0.20, so the company badly underperformed. All told, the company earned $8.83 million in the quarter. So if you add in the $1 million in recurring revenue from the two new clients, it’s still questionable whether that’s enough to push the company into positive net income territory.
The real growth in MTBC stock, if it’s really going to happen, is related to healthcare IT. The company’s core product – PracticePro – is a web-based solution that’s part of a SAAS (Software-As-A-Service) platform available to healthcare providers practicing in ambulatory care settings. Essentially, SAAS means that medical providers don’t have to download software to their office desktops – everything is managed in the cloud and, therefore, is accessible to other devices. That’s why the transition to mobile health makes so much sense.
All of the new client wins are definitely a promising sign. The company has a strong technology platform in a fast-growing space (healthcare IT). The only question is whether the company can continue to rack up the client wins and make its operations profitable.
A big wild card in all this might be the Trump administration, and what’s coming down the road for healthcare providers in late 2017 and 2018. Any major overhaul of Obamacare could have a direct impact on all healthcare providers, no matter where they fit into the overall health system. For more news on MTBC and other fast-moving penny stocks, please subscribe to OracleDispatch.com below.
