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Healius Ltd HLS

Morningstar Rating
A$1.21 +0.01 (0.41%)
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Company Report

Healius Appears Undervalued With Cost Base and Balance Sheet Reset

In 2018, the former Primary Healthcare rebranded itself as Healius to signify the strategic turnaround underway. Healius is looking to new sources of strategic growth as well as dealing with prior underinvestment in infrastructure. There is much to fix in the business and we anticipate it to take a few years before significant margin improvements are made in the base pathology and imaging businesses. Healius selling its medical centers and Montserrat day hospitals to focus on redirecting capital toward infrastructure upgrades and its diagnostic businesses is viewed as a positive strategic step.

Price vs Fair Value

HLS is trading at a 60% discount.
Price
A$1.21
Fair Value
A$2.00
Uncertainty
Medium
1-Star Price
A$1.79
5-Star Price
A$7.30
Economic Moat
Sbqpc
Capital Allocation
Pbyvqkfsx

Bulls Say, Bears Say

Bulls

On top of the base level of covid-19 testing that is likely to continue, Healius is well-positioned for underlying trends in preventive diagnostic treatments.

Bears

Elevated covid-19 testing is moderating and operating leverage is expected to unwind as earnings normalize.

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Trading Information

Previous Close Price
A$1.21
Day Range
A$1.181.22
52-Week Range
A$1.093.02
Bid/Ask
A$1.21 / A$1.22
Market Cap
A$878.58 Mil
Volume/Avg
783,846 / 2.8 Mil

Key Statistics

Price/Earnings (Normalized)
2.54
Price/Sales
0.46
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield

Company Profile

Healius is Australia’s second-largest pathology provider and third-largest diagnostic imaging provider. Pathology and imaging revenue is almost entirely earned via the public health Medicare system. Healius typically earns approximately 75% of revenue from pathology and 25% from diagnostic imaging.
Sector
Healthcare
Industry
Diagnostics & Research
Stock Style Box
Small Value
Total Number of Employees
11,000

Competitors

Valuation

Metric
HLS
SHL
DGX
Price/Earnings (Normalized)
2.5424.0914.63
Price/Book Value
0.891.612.25
Price/Sales
0.461.471.56
Price/Cash Flow
2.7510.8210.16
Price/Earnings
HLS
SHL
DGX

Financial Strength

Metric
HLS
SHL
DGX
Quick Ratio
0.440.781.04
Current Ratio
0.530.941.31
Interest Coverage
−13.265.957.87
Quick Ratio
HLS
SHL
DGX

Profitability

Metric
HLS
SHL
DGX
Return on Assets (Normalized)
0.10%4.07%7.47%
Return on Equity (Normalized)
0.23%7.01%16.07%
Return on Invested Capital (Normalized)
2.27%4.52%9.90%
Return on Assets
HLS
SHL
DGX
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