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Agiliti Posts Strong Q1 Results After IPO

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Agiliti Inc. (AGTI) posted strong first-quarter results after its initial public offering (IPO) last month. The provider of medical device management and services company posted revenues of $235 million in Q1, up 31% year-over-year, that came in ahead of the consensus estimate of $233.7 million.

Adjusted diluted earnings came in at $0.30 per share, up $0.25 from the same quarter last year. Analysts were expecting adjusted diluted earnings of $0.13 per share.

Agiliti’s CEO, Tom Leonard said, “Our strong first quarter results reflect the continued execution of our growth strategy and the extraordinary work of our entire team at Agiliti. The challenges of the past year helped raise awareness of the unique and essential nature of what we do, while also demonstrating the stable and predictable nature of our business model.”

“Agiliti is a critical part of our national healthcare infrastructure, and as the events of 2020 highlight, the services we provide are always necessary and in high demand. This long term consistency gives us confidence in our 2021 outlook and beyond,” Leonard added.

The company has used the IPO net proceeds to pay down its debt and has reduced its leverage ratio to 3.3x.

For FY21, the company expects revenue to land between $950 million and $975 million, and the forecast for adjusted EBITDA is between $275 million and $285 million. AGTI expects capex to be between $65 million and $70 million. (See Agiliti Inc stock analysis on TipRanks)

Following the earnings, Raymond James analyst Lawrence Keusch reiterated a price target of $16.50 (8.6% upside) and a Buy rating on the stock. Keusch said in a research note to investors, “The company addresses critical needs for healthcare institutions with an end-to-end solution in over 7,000 customers and with a nationwide logistics infrastructure that is the largest among its peers. Agiliti has the largest medical device rental fleet in the industry with close proximity to its customers.”

“The current market Agiliti services is estimated at $5.85B and growing at HSD rates with the company at ~12% share. Of note, Agiliti has 16% share of the current customer wallet, which positions it for durable market growth as it expands its reach, especially into instrument repair. With an estimated 15.3% five-year (2019-2023E) revenue growth CAGR and a high-20% EBITDA margin profile, we find the current 10.0x EV/EBITDA on 2022E as attractive,” Keusch added.

Overall, consensus among analysts is that AGTI is a Strong Buy based on 7 Buys and 1 Hold. The average analyst price target of $18.69 implies upside potential of about 22.4% from current levels.

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