Coliseum Capital, a significant stakeholder in ModivCare Inc. (NASDAQ:MODV), has increased its investment in the transportation services company, which has seen its stock decline 84.8% over the past year and currently trades near its 52-week low of $5.55. According to a recent SEC filing, Coliseum Capital acquired a total of 1,505,424 shares of ModivCare's common stock in a series of transactions conducted between January 10 and January 14, 2025.
The purchases, which totaled approximately $9.99 million, were executed at prices ranging from $5.88 to $8.79 per share. These transactions reflect Coliseum Capital's continued interest in ModivCare, as the firm now holds a substantial number of shares, reflecting its position as a ten-percent owner. According to InvestingPro analysis, the stock appears undervalued at its current market capitalization of $82.85 million.
Coliseum Capital's buying activity comes amid a period of strategic developments for ModivCare, as the company continues to expand its services in the transportation sector. While current technical indicators suggest the stock is in oversold territory, InvestingPro analysis reveals that analysts expect the company to return to profitability this year. Investors will be watching closely to see how this increased stake may influence ModivCare's future trajectory. For deeper insights into ModivCare's valuation and growth prospects, access the comprehensive Pro Research Report available on InvestingPro.
In other recent news, ModivCare Inc. has reported significant developments. The company announced Q3 earnings, revealing a revenue of $702 million and an adjusted EBITDA of $43 million, despite a net loss of $27 million. ModivCare revised its adjusted EBITDA guidance for 2024 to between $170 million and $180 million, and projects a 10% increase in adjusted EBITDA for 2025, driven by membership growth and new contracts.
In board changes, two directors, Christopher S. Shackelton and Rahul Samant, have stepped down, with vacancies filled by Craig Barbarosh and Neal Goldman. Leslie V. Norwalk has been appointed as the new Interim Chair of the Board.
Lake Street Capital Markets significantly reduced the price target for ModivCare shares to $10.00 from the previous $30.00 target, while maintaining a Buy rating. This follows ModivCare's announcement of withdrawing its financial guidance for the years 2024 and 2025 due to changes in its business and the broader market environment.
The company also secured $75 million in additional financing from existing lenders, with Coliseum Capital committing to invest $30 million in exchange for new second lien senior notes due in 2029. This financial arrangement is expected to provide liquidity until mid-year 2025, allowing the company to implement strategic actions, including potential asset sales. These recent developments reflect ModivCare's strategic positioning and operational efficiency.
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