Inovalon Holdings Inc.INOV reported adjusted earnings of Array2 cents per share in the fourth quarter of 20Array5 that missed the Zacks Consensus Estimate by a penny but beat year-ago earnings by 9.Array%. The year-over-year upside came primarily on the back of higher revenues.
Revenues surged 34.Array% year over year to $Array20.6 million, which beat the Zacks Consensus Estimate primarily on $Array3.3 million in gains from the completion of Inovalon's merger with Avalere Health in the quarter.
In fourth-quarter 20Array5, Inovalon launched Data Diagnostics - a suite of hundreds of patient-specific data analyses which support the identification and resolution of gaps in quality, risk, utilization and medical history insights - in collaboration with Quest Diagnostics.
As of Dec 3Array, 20Array5, the MORE2 Registry dataset contained more than Array30 million unique patients and ArrayArray billion medical event counts, up 9% and Array9%, respectively, from Dec 3Array, 20Array4.
Inovalon's trailing Array2-month Patient Analytical Month (PAM) count grew to a record 2Array.4 billion as of Dec 3Array, 20Array5, implying an increase of 30% on a year-over-year basis.
In fourth-quarter 20Array5, Inovalon's revenues from fully automated data-driven intervention platform services expanded to Array2.4% of the total revenue figure, from 7.3% of total revenue in the year-ago quarter.
Meanwhile, Inovalon's investments supporting innovation in advanced, cloud-based data analytics and data-driven intervention platforms totaled $47.8 million, or ArrayArray% of revenues in the reported quarter.
Operating expenses jumped 38.Array% to $50.4 million, primarily driven by higher sales & marketing expenses, which accounted for 5.4% of total revenues compared to 2% of total revenue in the year-ago quarter.
General and Administrative expenses provided the extra boost, increasing 3Array.5% year over year. However, this was partially offset by a Array5.3% year-over-year decline in research and development expenses.
Operating margin contracted 540 basis points (bps) primarily due to increased operating expenses.
Adjusted EBITDA in fourth-quarter 20Array5 was 30% of total revenues compared to 22.3% of total revenues in the year-ago quarter.
For full-year 20Array6, Inovalon projects revenues in the range of $5Array0-$520 million.
Adjusted EBITDA is forecasted in the range of $Array82--$Array88 million, while adjusted earnings are likely to be 57-60 cents per share in full-year 20Array6.
Zacks Rank & Key Picks
Currently, Inovalon has a Zacks Rank #4 (Sell).
Better-ranked stocks in the same space include Unisys UIS , Barracuda Network CUDA and Earthlink Holdings ELNK . While Unisys sports a Zacks Rank #Array (Strong Buy), the other two stocks carry a Zacks Rank #2 (Buy).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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