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Medical Facilities Corporation (TSE:DR)
TSX:DR
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Medical Facilities (DR) AI Stock Analysis

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TSE:DR

Medical Facilities

(TSX:DR)

Rating:59Neutral
Price Target:
C$15.50
▲(6.31% Upside)
The overall stock score of 59 reflects a combination of strong profitability and valuation metrics, offset by technical weaknesses and mixed earnings call results. The company's high profitability is a strength, but declining revenue and cash flow growth pose risks. Technical indicators suggest bearish momentum, while the low P/E ratio indicates potential undervaluation.

Medical Facilities (DR) vs. iShares MSCI Canada ETF (EWC)

Medical Facilities Business Overview & Revenue Model

Company DescriptionMedical Facilities (DR) is a healthcare management company that specializes in the ownership and operation of surgical facilities and hospitals. The company focuses on providing high-quality surgical and outpatient care across various specialties, including orthopedics, pain management, and gastroenterology. With a commitment to patient-centered care, Medical Facilities (DR) leverages advanced medical technology and skilled professionals to deliver exceptional healthcare services in a cost-effective manner.
How the Company Makes MoneyMedical Facilities (DR) generates revenue primarily through the provision of surgical and outpatient services at its facilities. Key revenue streams include patient billings for surgeries, diagnostic procedures, and outpatient treatments, which are often reimbursed by government and private insurance plans. Additionally, the company may earn revenue through facility fees charged for the use of its operating rooms and equipment. Strategic partnerships with healthcare providers and insurance companies also contribute to its earnings by ensuring a steady flow of patients and optimizing reimbursement rates. Furthermore, the company may engage in value-based care initiatives that can enhance profitability through improved patient outcomes and reduced costs.

Medical Facilities Earnings Call Summary

Earnings Call Date:Aug 07, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 06, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture. While there were notable achievements such as awards for Sioux Falls, substantial shareholder returns, and a new credit agreement, significant challenges were highlighted, particularly the revenue impact from Sioux Falls' relocation and decreased surgical volumes. Despite some areas of strong performance when excluding Sioux Falls, the financial metrics overall showed declines.
Q2-2025 Updates
Positive Updates
Sioux Falls Recognized for Excellence
Sioux Falls Specialty Hospital received the 2025 Outstanding Patient Experience and Patient Safety Excellence Awards from Healthgrades for the third consecutive year.
Shareholder Returns
Returned $6.9 million to shareholders through the repurchase of 609,100 common shares in the quarter. A total of $52.2 million returned to shareholders in the first half of the year, reducing outstanding shares by 18%.
New Credit Agreement
Finalized a new 3-year $40 million credit agreement with CIBC, with an option to increase by up to $25 million, providing enhanced financial flexibility.
Excluding Sioux Falls, Strong Performance
Facility service revenue increased by 6.5% when excluding Sioux Falls, driven by higher volumes, favorable case and payer mix, and payer rate increases.
Improved Cost Management
Total operating expenses were reduced by $0.5 million, with drugs and supplies down 2.4% and G&A expenses down 3.4%.
Negative Updates
Impact of Sioux Falls Relocation
Sioux Falls Specialty Hospital was negatively impacted by a $3.9 million revenue decline due to the relocation of a primary physician group's clinic affecting surgical case volume.
Decrease in Surgical Case Volumes
Surgical case volumes were down 0.9%, with inpatient cases down 8.6% and pain management cases down 4.5%.
Decline in Income from Operations
Income from operations decreased by 5% to just shy of $12 million, and EBITDA was down 4.7% from the prior year period.
Decrease in Working Capital
Net working capital declined from $76.4 million to $36.6 million, attributed to a substantial issuer bid and tax payments related to prior asset sales.
Company Guidance
During the 2025 second quarter earnings call for Medical Facilities Corporation, several metrics were discussed, providing insight into the company's financial performance and strategic initiatives. Facility service revenue decreased by 1.3% to $80.6 million, primarily due to challenges at Sioux Falls Specialty Hospital, which saw a revenue drop of $3.9 million. However, excluding Sioux Falls, facility service revenue rose by 6.5%, driven by higher volumes and favorable payer mix. Surgical case volumes overall dipped by 0.9%, with inpatient cases dropping 8.6%, and observation cases decreasing by 1.8%, while outpatient cases rose slightly by 0.7%. Pain management cases were down 4.5%, notably impacted by changes at Arkansas Surgical Hospital. Total operating expenses fell by $0.5 million, with income from operations down 5% to just under $12 million, though excluding Sioux Falls, income from operations surged by 98.9%. EBITDA was reported at $16 million, a 4.7% decline year-over-year. On the capital front, $6.9 million was returned to shareholders through share repurchases, totaling $52.2 million in the first half of the year, reducing outstanding shares by 18%. The company also finalized a new three-year $40 million credit agreement with CIBC, offering an option to increase the facility by up to $25 million under certain conditions.

Medical Facilities Financial Statement Overview

Summary
Medical Facilities demonstrates strong profitability with high profit margins and return on equity. However, challenges include declining revenue and free cash flow growth, which could impact future financial stability. The balance sheet reflects moderate leverage, but high ROE suggests potential vulnerability if earnings decrease.
Income Statement
65
Positive
The income statement shows a mixed performance. The company has a strong gross profit margin of 65.8% TTM, indicating efficient cost management. However, the revenue growth rate is negative at -8.7% TTM, reflecting a decline in sales. The net profit margin improved to 24.7% TTM, suggesting better profitability, but the EBIT and EBITDA margins have remained relatively stable. Overall, the company demonstrates profitability but faces challenges in revenue growth.
Balance Sheet
60
Neutral
The balance sheet indicates moderate financial stability. The debt-to-equity ratio is 0.88 TTM, showing a manageable level of leverage. The return on equity is high at 84.4% TTM, reflecting strong profitability relative to shareholder equity. However, the equity ratio is not provided, limiting a full assessment of asset financing. The company maintains a balanced approach to debt and equity, but the high ROE suggests potential risk if earnings decline.
Cash Flow
55
Neutral
The cash flow statement reveals some concerns. The free cash flow growth rate is negative at -15.9% TTM, indicating a decrease in cash available after capital expenditures. The operating cash flow to net income ratio is 0.93 TTM, showing that operating cash flow is closely aligned with net income. The free cash flow to net income ratio is 0.92 TTM, suggesting efficient cash generation relative to profits. Despite solid cash flow ratios, declining free cash flow growth is a potential risk.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue278.37M331.53M445.58M424.55M398.63M363.85M
Gross Profit181.07M219.88M296.68M280.63M268.61M242.94M
EBITDA73.03M82.57M72.43M51.15M103.40M96.05M
Net Income80.45M73.49M18.50M-4.41M15.50M8.81M
Balance Sheet
Total Assets274.24M346.29M354.88M377.79M446.97M457.00M
Cash, Cash Equivalents and Short-Term Investments49.03M108.50M24.11M34.93M61.04M66.18M
Total Debt67.63M73.94M116.81M142.95M140.90M161.95M
Total Liabilities173.54M198.84M236.58M263.10M273.82M281.83M
Stockholders Equity76.21M122.02M85.99M79.13M127.55M127.53M
Cash Flow
Free Cash Flow57.59M76.22M56.66M50.30M67.22M79.57M
Operating Cash Flow61.17M83.28M72.71M57.01M75.64M87.09M
Investing Cash Flow88.90M85.42M-13.67M-5.78M-8.69M18.31M
Financing Cash Flow-118.86M-84.26M-69.83M-77.35M-72.06M-71.15M

Medical Facilities Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price14.58
Price Trends
50DMA
15.09
Negative
100DMA
15.17
Negative
200DMA
15.57
Negative
Market Momentum
MACD
-0.15
Negative
RSI
47.70
Neutral
STOCH
47.33
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:DR, the sentiment is Neutral. The current price of 14.58 is above the 20-day moving average (MA) of 14.54, below the 50-day MA of 15.09, and below the 200-day MA of 15.57, indicating a neutral trend. The MACD of -0.15 indicates Negative momentum. The RSI at 47.70 is Neutral, neither overbought nor oversold. The STOCH value of 47.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:DR.

Medical Facilities Peers Comparison

Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
69
Neutral
C$1.08B13.1265.09%3.92%8.68%39.93%
59
Neutral
$272.66M2.0641.13%2.47%-35.35%948.72%
56
Neutral
C$1.64B44.636.94%5.28%10.13%1.30%
53
Neutral
C$188.40M-2.17%-0.16%75.25%
51
Neutral
$7.90B-0.33-41.69%2.23%23.45%-1.99%
46
Neutral
C$1.21B30.45-14.61%20.36%-186.10%
41
Neutral
C$1.94M-1473.72%-22.61%7.72%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:DR
Medical Facilities
14.58
1.53
11.69%
TSE:CRRX
CareRx
3.00
1.14
61.29%
TSE:EXE
Extendicare
12.96
4.49
53.01%
TSE:SIA
Sienna Senior Living
17.72
2.43
15.89%
TSE:WELL
WELL Health Technologies Corp
4.64
0.55
13.45%
TSE:PHA
Premier Health of America Inc
0.03
-0.13
-81.25%

Medical Facilities Corporate Events

Dividends
Medical Facilities Corporation Declares Third Quarter Dividend
Positive
Aug 7, 2025

Medical Facilities Corporation announced a cash dividend of Cdn $0.09 per common share, payable on October 15, 2025, to shareholders of record as of September 30, 2025. This dividend is designated as an ‘eligible dividend’ under Canadian tax law. This announcement reflects the company’s ongoing commitment to providing shareholder value and may influence investor perceptions and market positioning.

The most recent analyst rating on (TSE:DR) stock is a Hold with a C$16.00 price target. To see the full list of analyst forecasts on Medical Facilities stock, see the TSE:DR Stock Forecast page.

Private Placements and FinancingBusiness Operations and StrategyFinancial Disclosures
Medical Facilities Corporation Reports Q2 2025 Results and Secures New Credit Agreement
Neutral
Aug 7, 2025

Medical Facilities Corporation reported a mixed financial performance for the second quarter of 2025, with a 1.3% decrease in facility service revenue primarily due to the relocation of a key physician group’s clinic affecting Sioux Falls Specialty Hospital. Despite this, the company saw a significant increase in net income from continuing operations, attributed to variations in non-cash finance costs and income taxes. The company also announced a new $40 million credit agreement to provide future financial flexibility, signaling a strategic move to strengthen its financial position.

The most recent analyst rating on (TSE:DR) stock is a Hold with a C$16.00 price target. To see the full list of analyst forecasts on Medical Facilities stock, see the TSE:DR Stock Forecast page.

Financial Disclosures
Medical Facilities Corporation to Release Q2 2025 Financial Results
Neutral
Jul 24, 2025

Medical Facilities Corporation is set to announce its second quarter 2025 financial results on August 7, 2025, before the market opens. The results will be available on SEDAR+ and the company’s website, followed by an earnings conference call. This announcement is a routine disclosure that provides stakeholders with insights into the company’s financial performance and operational health, potentially impacting investor decisions and market perceptions.

The most recent analyst rating on (TSE:DR) stock is a Hold with a C$16.00 price target. To see the full list of analyst forecasts on Medical Facilities stock, see the TSE:DR Stock Forecast page.

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: Aug 20, 2025