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ModivCare (MODV)
NASDAQ:MODV

ModivCare (MODV) AI Stock Analysis

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ModivCare

(NASDAQ:MODV)

Rating:49Neutral
Price Target:
$3.00
▼(-7.69%Downside)
ModivCare faces significant financial challenges, including negative cash flows and high leverage, which heavily weigh down the overall score. The potential growth from new contracts and digital advancements is overshadowed by the risk of Nasdaq delisting and unattractive valuation metrics. The technical indicators provide some short-term optimism, but the long-term outlook remains concerning.
Positive Factors
Contract Strategy
The company is shifting shared risk contracts to fee-for-service agreements, which should provide quicker collections and improved cash flow visibility.
Financing
ModivCare has secured $75 million in incremental financing and an additional $30 million capital commitment, indicating a strong influx of capital.
Leadership and Strategy
The appointment of a Chief Transformation Officer is expected to focus on asset divestitures, which could unlock significant value for ModivCare.
Negative Factors
Debt and Leverage
ModivCare's total debt stands at $1.36 billion, highlighting a high level of leverage.
Financial Performance
Q1 cash flows were shockingly poor at around -$82.1 million, indicating significant financial challenges.
Revenue Impact
Two significant contracts were lost, which represented around $200 million of annual revenues, impacting the company's core earnings power.

ModivCare (MODV) vs. SPDR S&P 500 ETF (SPY)

ModivCare Business Overview & Revenue Model

Company DescriptionModivCare Inc. (MODV) is a leading provider of non-emergency medical transportation (NEMT) services, digital health, and personal care services. The company operates primarily in the healthcare sector, focusing on addressing social determinants of health to improve access to care for underserved populations. ModivCare offers transportation services to patients who need assistance getting to medical appointments, thereby facilitating access to necessary healthcare services.
How the Company Makes MoneyModivCare generates revenue primarily through contracts with state governments, managed care organizations, and healthcare providers who require non-emergency medical transportation for their patients. These contracts often involve long-term agreements and are typically structured on a per-ride or capitated basis, where ModivCare is paid a fixed amount per member per month. The company also derives income from its digital health offerings and personal care services, which include in-home support for individuals needing assistance with daily activities, further expanding its revenue streams and solidifying its position in the healthcare ecosystem.

ModivCare Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q1-2025)
|
% Change Since: 140.74%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant efforts in securing new contracts and advancing digital transformation, which show promise for future growth. However, these positives are tempered by decreased revenue, increased net loss, and negative cash flow, reflecting ongoing challenges.
Q1-2025 Updates
Positive Updates
New Medicaid Managed Care Contracts
Secured two new Medicaid managed care contracts in the Southwest and Pacific region, with a combined annual contract value of approximately $52 million and expected in-year revenue contribution of around $38 million.
Digital Transformation Progress
Self-service call-to-trip ratio reached 36.1%, up from 35% in Q4 and 31% a year ago. Complaints declined 31.2% year over year, and on-time performance rose to 95.2%.
G&A Reduction Initiative
Launched a company-wide G&A reduction initiative targeting approximately $25 million in annualized savings.
Successful Collection of Receivables
Collected a large NCO contract receivable from 2024 of approximately $30 million a month earlier than expected.
Revenue Per Member Increase
Revenue per member per month rose 16% year over year, to $6.35, up 13% sequentially.
Negative Updates
Revenue Decline
Revenue for the quarter was $650.7 million, down 5% year over year and 2% sequentially.
Net Loss Increase
Net loss for the quarter was $50.4 million, up from $22.3 million a year ago, primarily due to higher interest expense.
Contract Loss
Experienced the loss of a regional contract totaling $15 million in annual revenue due to a national plan's decision to consolidate vendors.
Negative Free Cash Flow
Free cash flow was negative at $86.2 million, largely due to working capital build from timing of accounts payable, contract transitions, and higher interest expense.
Company Guidance
During the call, ModivCare Inc. provided guidance that emphasized five strategic objectives: growing customer relationships, digitizing their care access platform, optimizing their operating model, increasing capital efficiency, and delivering client-centric supportive care. In Q1 2025, the company secured two new Medicaid managed care contracts worth approximately $52 million in annual value and submitted four state contract renewals totaling over $246 million. Despite a loss of a $15 million regional contract, they focused on strengthening customer retention. The digital transformation efforts led to a self-service call-to-trip ratio increase to 36.1%, a 1.2% reduction in unit costs, and a 31.2% decrease in complaints. Revenue for the quarter was $650.7 million, down 5% year over year, with a net loss of $50.4 million. Adjusted EBITDA was $32.6 million, flat year over year. ModivCare is not issuing formal guidance for 2025, but is committed to executing initiatives with measurable KPIs, focusing on cash flow improvements, cost-saving measures, and platform modernization.

ModivCare Financial Statement Overview

Summary
ModivCare is facing significant financial challenges with declining revenue, consistent net losses, negative net profit margins, high leverage, and liquidity issues. The company's reliance on debt financing and inability to generate positive cash flow raise concerns about its financial health.
Income Statement
55
Neutral
ModivCare's income statement shows a challenging financial situation with declining revenue and consistent net losses. The TTM (Trailing-Twelve-Months) data reveals a negative net profit margin and EBIT margin, indicating operational inefficiencies. Although the historical revenue growth has been substantial, recent trends show stagnation, and profitability has not been maintained.
Balance Sheet
42
Neutral
The balance sheet reflects high leverage with a negative stockholders' equity, indicating financial instability. The debt-to-equity ratio is concerning as it suggests heavy reliance on debt financing. The equity ratio is negative, which signals financial distress and potential solvency issues.
Cash Flow
38
Negative
Cash flow analysis reveals negative operating and free cash flows, indicating liquidity challenges. The free cash flow growth rate remains negative, and the negative operating cash flow to net income ratio underscores inefficiencies in transforming earnings into cash. These factors point towards potential difficulties in maintaining adequate cash reserves.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue2.75B2.79B2.75B2.50B2.00B1.37B
Gross Profit417.15M420.37M446.95M472.32M412.59M289.88M
EBITDA250.00K4.88M-23.33M157.50M146.77M148.22M
Net Income-229.35M-201.28M-204.46M-1.84M31.96M88.84M
Balance Sheet
Total Assets1.68B1.65B1.77B1.94B2.03B1.43B
Cash, Cash Equivalents and Short-Term Investments115.96M112.58M2.22M14.45M133.14M183.28M
Total Debt113.22M1.30B1.14B1.02B1.02B517.74M
Total Liabilities1.76B1.69B1.61B1.59B1.65B1.01B
Stockholders Equity-87.63M-38.47M156.19M354.56M373.27M411.61M
Cash Flow
Free Cash Flow-121.14M-34.04M-125.26M-43.45M165.52M336.29M
Operating Cash Flow-97.30M-6.41M-82.97M-10.44M186.84M348.44M
Investing Cash Flow-23.84M-27.63M-42.29M-111.81M-685.63M-635.01M
Financing Cash Flow231.05M144.37M113.07M3.81M448.85M408.26M

ModivCare Technical Analysis

Technical Analysis Sentiment
Positive
Last Price3.25
Price Trends
50DMA
2.12
Positive
100DMA
2.46
Positive
200DMA
7.84
Negative
Market Momentum
MACD
0.31
Positive
RSI
56.33
Neutral
STOCH
17.36
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MODV, the sentiment is Positive. The current price of 3.25 is below the 20-day moving average (MA) of 3.39, above the 50-day MA of 2.12, and below the 200-day MA of 7.84, indicating a neutral trend. The MACD of 0.31 indicates Positive momentum. The RSI at 56.33 is Neutral, neither overbought nor oversold. The STOCH value of 17.36 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MODV.

ModivCare Risk Analysis

ModivCare disclosed 64 risk factors in its most recent earnings report. ModivCare reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

ModivCare Peers Comparison

Overall Rating
UnderperformOutperform
Sector (55)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
NHNHC
78
Outperform
$1.68B15.6911.19%2.36%19.16%31.92%
SESEM
64
Neutral
$1.95B11.2710.38%1.65%-8.86%-36.22%
55
Neutral
€4.83B18.24-49.50%1.92%13.92%-4.82%
53
Neutral
$907.19M267.2442.49%9.05%
49
Neutral
$426.51M-4.00%-29.16%-140.16%
49
Neutral
$46.65M-951.52%-0.70%-2.38%
AMAMN
49
Neutral
$839.20M18.62-21.08%-18.13%-215.78%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
MODV
ModivCare
3.25
-21.82
-87.04%
AMN
AMN Healthcare Services
21.92
-27.18
-55.36%
CCRN
Cross Country Healthcare
13.01
-0.67
-4.90%
NHC
National Healthcare
108.44
-4.01
-3.57%
SEM
Select Medical
15.14
-3.90
-20.48%
AVAH
Aveanna Healthcare Holdings
4.65
2.08
80.93%

ModivCare Corporate Events

Executive/Board ChangesShareholder Meetings
ModivCare Approves All Measures at Annual Meeting
Neutral
Jun 18, 2025

On June 17, 2025, ModivCare Inc. held its annual meeting of stockholders where all proposed measures were approved, and the recommended director nominees were elected for a one-year term. The meeting also saw the approval of the executive officer compensation and the ratification of KPMG LLP as the independent registered public accounting firm for the 2025 fiscal year.

The most recent analyst rating on (MODV) stock is a Hold with a $3.50 price target. To see the full list of analyst forecasts on ModivCare stock, see the MODV Stock Forecast page.

Delistings and Listing ChangesPrivate Placements and FinancingFinancial Disclosures
ModivCare Faces Nasdaq Delisting Warning Amid Revenue Decline
Negative
May 8, 2025

On May 5, 2025, Modivcare received a notification from Nasdaq regarding its market value of publicly held shares falling below the required threshold for continued listing. The company has until November 1, 2025, to regain compliance, with potential consequences including delisting or transferring to the Nasdaq Capital Market if compliance is not achieved. In its first quarter of 2025, Modivcare reported a service revenue decline to $650.7 million, a net loss of $50.4 million, and efforts to reduce costs and improve working capital efficiency. The company executed $105 million in new financing to support its transformation efforts and aims to generate over $20 million in annualized G&A savings.

Executive/Board ChangesBusiness Operations and Strategy
ModivCare Announces CFO and CIO Departures
Neutral
May 5, 2025

On May 5, 2025, Modivcare announced the planned departures of its Chief Financial Officer, Barb Gutierrez, and Chief Information Officer, Jessica Kral, as part of its strategic business model evolution. The company will not replace these roles, relying instead on existing teams to support its modernization strategy, which includes cost reduction and technology-driven integration efforts. This leadership transition is part of a broader structural shift aimed at increasing organizational speed and accountability.

Executive/Board Changes
ModivCare Appoints Daniel Silvers to Board
Neutral
Apr 25, 2025

On April 25, 2025, Modivcare announced the appointment of Daniel Silvers to its board of directors, effective April 24, 2025, completing its plan to add three new independent directors. Mr. Silvers brings extensive experience in corporate finance and governance, which is expected to enhance Modivcare’s operational and financial strength. Concurrently, Craig Barbarosh, David Coulter, and Richard Kerley resigned from the board, with Coulter continuing as a board observer and Alexander Matina joining as a board observer.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 05, 2025