NEW YORK, NY / ACCESSWIRE / March 7, 2016 / SeeThruEquity, a leading independent equity research and corporate access firm focused on smallcap and microcap public companies, today announced it has initiated coverage on Hooper Holmes Inc. (NYSE MKT: HH) with a 12 month price target of $0.51.
The report is available here: HH Initiation Report. SeeThruEquity is an approved equity research contributor on Thomson First Call, Capital IQ, FactSet, and Zack's. The report will be available on these platforms. The firm also contributes its estimates to Thomson Estimates, the leading estimates platform on Wall Street.
Olathe, Kansas-based Hooper Holmes provides a comprehensive suite of health and wellness solutions to business and government employers in the United States. Hooper Holmes' fully integrated health and wellness solutions are designed to be best-in-class in the industry - utilizing proprietary technology to offer biometric screenings, data collection / management, health coaching, a wellness portal and other educational resources. The company currently provides health and wellness solutions to over 3,000 employers with approximately 1mn plan participants. Hooper Holmes appears well-positioned to grow these figures substantially over the next several years as it targets the $7Bn+ annual market opportunity for health and wellness services in the United States. Indeed, the company has a 100+ year history in the healthcare industry, and has developed a growing business over the last several years providing biometric screening, risk assessment and clinical research data collection, which was expanded significantly by the transformative acquisition of Accountable Health Systems (AHS) last April.
"In our view, Hooper Holmes targets a large and intriguing market opportunity providing comprehensive health and wellness solutions to corporate and government employers. Hooper Holmes offers an end-to-end integrated health and wellness solution, including screening and data collection, education and engagement. Hooper Holmes is well-established in offering biometric screening, clinical research support and mobile data collection. Hooper Holmes has guided to revenue of $42mn in 2016E, which will be its first full year of results including AHS. The company believes it can generate operating cash flow during 2016E – a crucial accomplishment, if achieved – and management sees dramatic margin expansion as the company grows thereafter," stated Ajay Tandon, CEO of SeeThruEquity. "We are initiating coverage with a 12-month price target of $0.51 per share."
Additional highlights from the report are as follows:
Compelling valuation with high growth potential
At recent prices, we view Hooper Holmes as offering a nice combination of growth potential and compelling value. With the recent acquisition of AHS Hooper Holmes has expanded its solutions and accelerated its penetration into the small and medium-sized business market. We expect Hooper Holmes to continue to invest in new growth initiatives, as management has set its sights on the bold goal of reaching an annual run rate of $100mn in sales in the next 4-5 years. This outlook implies robust future growth, while company shares can be had at a market capitalization of $14.1mn – just 0.3x 2016E estimated revenues of $42mn – a significant discount to a peer group that trades at approximately 2.4x 2016E revenues. Moreover, Hooper Holmes appears to have several key milestones within its grasp, as the company recently completed the integration of AHS and has guided to a return to cash flow generation in 2016E.
Health and Wellness a large and growing market opportunity
The market opportunity for Hooper Holmes' health and wellness offerings for government and corporate employees is large and growing. Indeed, its target annual market opportunity in the United States alone is approximately $7 billion, comprising Health Screenings ($2.3 billion), Clinical Research ($1Bn applicable to Hooper Holmes offerings), Education ($1.5 billion), and Health and Cost Management ($2.2 billion). The size and trajectory of this market is not surprising given the clear benefits of health and wellness programs to employers, which include reduced health risks and associated costs, improved employee productivity and morale, and reduced absenteeism resulting from a healthier employee base. Moreover, Hooper Holmes is one of only a small number of publicly traded pure plays in the health and wellness sector, and the company is able to use its brand recognition, national presence, and comprehensive solution set of health and wellness programs to stand out against competition that is largely comprised of regionalized private companies addressing heath and wellness with 1-2 point products.
Initiate coverage with a price target of $0.51
Our analysis indicates a fair value estimate of $0.51 per share. We view Hooper Holmes as an undervalued growth company targeting the emerging and highly attractive health and wellness industry. With a recent equity raise and the integration of AHS behind it, we see the potential for a clear road ahead of Hooper Holmes as the company should register nice growth in 2016E and has guided to a return a generating cash flow – an impressive milestone, if reached. Our price target of $0.51 considers a valuation of 1.4x 2016E sales, which is an appropriate discount to peers, in our view, until the company demonstrates that it can reliably generate cash while growing the top line. If achieved, the price target represents upside potential of 363% from the recent price of $0.11.
Please review important disclosures at www.seethruequity.com.
About Hooper Holmes Inc.
Hooper Holmes mobilizes a national network of health professionals to provide on-site health screenings, laboratory testing, risk assessment and sample collection services to wellness and disease management companies, employers and brokers, government organizations and academic institutions nationwide. Under the Accountable Health Solutions brand, the Company combines smart technology, healthcare and behavior change expertise to offer comprehensive health and wellness programs that improve health, increase efficiencies and reduce healthcare delivery costs.
About SeeThruEquity
SeeThruEquity is an equity research and corporate access firm focused on companies with less than $1 billion in market capitalization. The research is not paid for and is unbiased. The company does not conduct any investment banking or commission based business. SeeThruEquity is approved to contribute its research to Thomson One Analytics (First Call), Capital IQ, FactSet, Zacks, and distribute its research to its database of opt-in investors. The company also contributes its estimates to Thomson Estimates, the leading estimates platform on Wall Street.
For more information visit www.seethruequity.com.
Contact:
Ajay Tandon
SeeThruEquity
info@seethruequity.com
SOURCE: SeeThruEquity
