Shares of telemedicine company Reliq Health Technologies Inc. (RHT:TSX.V; RQHTF:OTCQB; A2AJTB:WKN) went up nearly 20% this week on news that its revenue increased 485% to CA$8.6 million from the fiscal year 2021 to the fiscal year 2022.
Expert Clive Maund wrote on Tuesday, saying it was a “good time to buy.”
Its share price went up from CA$0.52 to CA$0.62 the day the news was released on Wednesday. The day before, technical analyst Clive Maund wrote that the stock was “believed to have been in a basing process since last May.”
“It attempted to break higher on increased volume about a week ago, but with its 200-day moving average still dropping toward the price overhead, it was not quite ready,” he wrote on Tuesday, saying it was a “good time to buy.”
Jefferson Research also raised its rating of the stock from Sell to Hold, saying its earnings quality in the third quarter went from “strong” to “strongest,” and its cash flow quality improved from “weak” to “strong.”
“Cash flow is considered by many investors to be the ultimate measure of company performance and more reliable than reported earnings,” Jefferson wrote.
Huge changes because of the COVID-19 pandemic have contributed to the increasing acceptance of home-based services, Reliq Chief Executive Officer Lisa Crossley told Streetwise Reports.
The company said gross profits increased YOY by more than 515% to CA$5.3 million, and the gross margin for the year was 62%.
“COVID helped with getting clinicians who otherwise weren't particularly comfortable with the concept of virtual care and forced them to be comfortable,” Crossley said. “That's definitely helped drive adoption for us.”
The company said gross profits increased YOY by more than 515% to CA$5.3 million, and the gross margin for the year was 62%.
Revenue for Reliq’s software and service sales increased more than 1,940% to CA$2.7 million for the fiscal year 2022, which ended June 30, compared to more than CA$134,000 for the fiscal year 2021.
The company said gross profits increased YOY by more than 515% to CA$5.3 million, and the gross margin for the year was 62%.
The Catalyst
Internet-enabled health care is becoming more accepted in the wake of the pandemic. Government and private insurance plans have expanded their coverage for the services, allowing more doctors to look at remote solutions like Reliq’s remote patient monitoring and virtual care platform.
Reliq expects to have as many as 200,000 patients on its platform by the middle of 2023.
“We have a certain number of clients and patients (that have already) announced and committed” to the platform, Crossley said. “But we're also starting to really pick up in terms of the size of contracts that we're signing and the size of clients that we're working with.”
Reliq recently signed new contracts, including expanding one with a network of skilled nursing facilities in Florida to add as many as 60,000 new patients per year onto the platform, iUGO. Each patient is expected to generate US$65 per month at a 75% gross margin.
Word of Mouth
Crossley said the company is expecting rapid growth the more contracts it signs with such facilities.
“We’ve gotten to the point where word of mouth is really driving a lot of our business, but not just with individual physician practices and home health agencies, but with these much larger networks,” she said.
Skilled nursing facilities are a largely untapped market for the company. Reliq said there are over 15,000 of them in the United States and more than 1.5 million Medicare patients received care from such networks in 2021.
The average practice can generate new revenue of more than US$400 per patient per month with the platform while paying US$40 to US$100 per patient per month to subscribe to iUGO.
The company also does the pre-screening and pre-authorizations with Medicare and Medicaid and electronic submissions for payment.
Diseases the company aims to manage at home include chronic obstructive pulmonary disease (COPD), congestive heart failure, diabetes, hypertension, and others. Patients get audible reminders to step on a scale, take their blood pressure, or prick their fingers for glucose monitoring. The information is automatically uploaded to the cloud.
Ownership and Share Structure
Top shareholders include Crossley, who owns 1.56% or 3 million shares; Penserra Capital Management LLC, which owns 0.23% or 0.43 million shares; and Eugene Beukman, who owns 0.12% or 0.23 million shares, according to Reuters.
The company has 191.5 million shares outstanding, with 188 million of them free-floating. It has a market cap of CA$128 million and trades in a 52-week range of CA$1.33 and CA$0.36.
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Disclosures:
1) Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
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