Concentra Group Holdings: Strong Q1 Performance and Strategic Acquisitions Justify Buy Rating and Price Target Increase

Bank of America Securities analyst Joanna Gajuk has reiterated their bullish stance on CON stock, giving a Buy rating on April 22.

Joanna Gajuk’s rating is based on several positive developments for Concentra Group Holdings Parent, Inc. The company reported a slight beat in its adjusted EBITDA, which was better than expected due to improved margins. Additionally, Concentra raised its revenue and EBITDA guidance by 1% following a strong first quarter and a small acquisition in early March. This acquisition, along with the company’s unique payor mix and mid-single-digit organic growth, contributes to the potential upside.
Furthermore, Concentra’s workers’ compensation revenues, which make up a significant portion of its total revenue, grew by 8% year-over-year, aligning with estimates and slightly surpassing consensus expectations. Employer services revenues also showed improvement, with volumes accelerating compared to the previous quarter. These factors, combined with a pending acquisition not yet included in the guidance, bolster confidence in the company’s growth prospects, justifying the Buy rating and a price objective increase to $27.