Greenbrook TMS obtains a brand new aim of $ 24.00 at Desjardins

Greenbrook TMS (Greenbrook TMS Inventory Quote, Chart, Information, Analysts, Financials TSX: GTMS) has come a good distance in latest months, however buyers ought to anticipate extra upside, says Desjardins Capital Markets analyst David Newman . Newman gave prospects an replace on the corporate on Friday, the place he reiterated his “Purchase” ranking, however raised his goal worth from C $ 15.00 to C $ 24.00, which on the time of the decision was made. publishes a 12 month anticipated return on the time of 34.9%. .

Greenbrook is the most important supplier in the US of TMS or Transcranial Magnetic Stimulation Remedy for the therapy of melancholy and different psychological well being issues. The corporate has 125 therapy facilities and has supplied greater than 510,000 MSD therapies to greater than 14,000 sufferers with melancholy.

On February 16, Desjardins organized a no-deal digital roadshow with Greenbrook, during which Newman got here out impressed, amongst different issues, by the corporate’s progress prospects, the alternatives for mergers and acquisitions and higher publicity to buyers.

Newman stated Greenbrook plans to open 140 processing facilities by the second or third quarter of this 12 months.

“Along with the event of the middle (including density in new areas), we consider that GTMS goals to amass small gamers in a number of areas. We consider the deal dimension is probably going within the mid single-digit vary, with a constant evaluation towards pre-pandemic ranges to account for the goal’s historic progress and restoration after COVID-19 ” , Newman wrote.

The COVID-19 pandemic has led to a rise in psychological well being issues, with a reported 30-40% improve in prescriptions for melancholy in the US, in line with Newman, with round 50% of these for the primary time. the sufferers. The analyst predicted that the rise is anticipated to lead to massive volumes at Greenbrook clinics over the subsequent eight to 12 months after sufferers are recognized or about six to eight months after sufferers fail to drug therapy. ‘they journey by means of the well being care system. The result’s a veritable tsunami of sufferers, in line with Newman, who is anticipated to achieve the GTMS pipeline within the second half of this 12 months.

In terms of affected person acquisition, Newman stated the corporate is properly positioned, with a community of 25 to 30 representatives producing new sufferers, a healthcare information analytics platform and benefiting from a elevated commercialization of medical machine producers.

To buyers, Newman famous that curiosity within the firm’s latest one-for-five share consolidation, the upcoming NASDAQ itemizing (seemingly in March), and inclusion within the Psychedelic Horizons ETF, in addition to GTMS’s $ 30 million credit score facility, closed this transaction. previous december. (All figures are in US {dollars}, except in any other case famous.)

As for the inventory, GTMS began to climb in December, going from C $ 7.00 per share to over $ 20.00 in early February. There’s in all probability extra to come back, Newman says.

“We consider GTMS’s share worth has a major head begin given its management place in a big and rising addressable market, its impending NASDAQ itemizing, and a stronger liquidity place. to help progress and larger investor consciousness (particularly within the US), supported by the underlying second wave. melancholy, with COVID-19 serving as a catalyst, ”Newman wrote.

“Given the COVID-19-induced delays within the second-year ramp of recent facilities opened in 2018-19, administration expects to attain profitability in late December 2021 or early 2022,” Newman stated.

The analyst revised his estimates for Greenbrook, now calling for full 2020 income and EBITDA of $ 45.6 million and adverse of $ 6.3 million, respectively, 2021 income and a EBITDA of $ 66.2 million and adverse earnings of $ 2.2 million, respectively, and 2022 income and EBITDA of $ 97.0 million and $ 13.9 million, respectively.

Forward of the anticipated fourth quarter outcomes on March 30, Greenbrook final stated in November, the place its third quarter noticed income improve 42% year-over-year and 23% sequentially to 12, $ 0 million. Adjusted EBITDA represented a lack of $ 937,073.

“In Q3 2020, we proudly introduced our second highest quarterly income outcomes since our inception and a return to robust regional working revenue, regardless of the tough working surroundings imposed by the COVID-19 pandemic,” stated the President- CEO Invoice Leonard in a Nov. 10 press launch.

“We continued to attain month-to-month information for brand spanking new affected person departures all through the third quarter of 2020, underscoring the essential want for TMS remedy in these tough occasions. We consider these month-to-month information will help a powerful upward development within the fourth quarter of 2020, ”he stated.

For the approaching fourth quarter, Newman expects income of $ 12.3 million and EBITDA lack of $ 1.9 million.

With the third quarter outcomes, Greenbrook introduced the launch of a pilot program involving a nasal spray referred to as Spravato for common anesthesia and treatment-resistant melancholy. The pilot undertaking will likely be launched in 5 GTMS facilities.

Newman stated if the pilot program is profitable, the corporate may deploy Spravato in some facilities in its community.

“Particular person facilities may gain advantage from larger working leverage, particularly since they fill the each day sections and facilitate the stream of sufferers all through the day, which interprets into larger productiveness” , Newman wrote.

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