Cantor starts CareCloud at OW: PT $15

Cantor Fitzgerald launched coverage of CareCloud (NASDAQ:MTBC) with an “overweight” rating and $15 price target. The stock closed at $8.54 on June 10.

CareCloud, formerly known as MTBC Inc., provides a broad range of healthcare IT services and applications to a wide range of providers. Prior to the acquisition of MTBC, the company mostly focused on revenue cycle services for smaller physician offices. With the acquisition of CareCloud, the company added a SaaS- based electronic health records application. 

Analyst Steven Halper writes that the company’s large offshore workforce is a competitive advantage in its pricing as well as how it integrates acquisitions. “Indeed, acquisitions have been an important component of the company’s growth, and we expect that to continue,” he added. 

“We think CareCloud shares are inexpensive on an EV/EBITDA basis,” Mr. Halper said. However, the company’s capital structure is complex, given the previous issuance of perpetual preferred shares. 

“We believe CareCloud is contemplating simplifying its corporate structure, which we believe would serve as a catalyst for the shares,” he added. “Even with the preferred, we believe CareCloud shares are very attractive at current levels, with about 75% upside to our discounted cash flow-based price target of $15.”