Raymond James analyst John Ransom has maintained their bullish stance on RDNT stock, giving a Buy rating on December 1.
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John Ransom’s rating is based on a combination of factors that highlight RadNet’s strategic business decisions and growth potential. Despite a short report questioning the company’s practices, Ransom notes that RadNet’s approach to consolidating facilities is a sound business move. By migrating scan volumes from smaller, less efficient centers to larger ones, RadNet effectively reduces operating expenses and enhances revenue growth, which is projected to be around 10% for imaging centers. Additionally, the company’s imaging center EBITDA growth is expected to be approximately 11%, excluding the impact of a first-quarter fire.
Furthermore, Ransom addresses concerns about RadNet’s AI technology, emphasizing its success in detecting thousands of breast cancer cases and its acceptance by patients and some payors. The elevated stock compensation is attributed to the investment in the DeepHealth business, with expectations of it normalizing in the coming years. Lastly, Ransom points out that RadNet’s data supports the effectiveness of early breast cancer detection, which has significantly improved patient outcomes, countering skepticism raised by a recent study. These factors collectively support his Buy rating for RadNet’s stock.
In another report released on December 1, B. Riley Securities also reiterated a Buy rating on the stock with a $87.00 price target.