- Since its debut via a reverse merger, Nutex Health (NUTX) stock has traded wildly.
- But out of favor at present, this healthcare management company has fallen to a low valuation.
- Its risks notwithstanding, if you’re looking for speculative, high-potential plays, NUTX stock may be a great choice.
Nutex Health (NASDAQ:NUTX) started trading less than two months ago, but in this short time frame NUTX stock has experienced some big swings. Climbing to as much as $52.80 per share at its debut, within days it fell back to single-digit prices.
Late last month, it went on a relatively smaller super rally. Right now, however, this healthcare management company is again out of favor. For those who invest based on the fundamentals, this may work to your advantage.
Why? No longer trading on hype, future price movements hinge more on its underlying business performance. That’s not to say it’s not without its risks. In fact, more risk-averse investors may want to skip out on it. Yet if you have a high risk appetite, and are looking for speculative plays with high upside potential? You may want to add it to your watchlist.
NUTX Stock at a Glance
Based in Houston, Texas, Nutex Health provides diversified healthcare management services. It’s made up of two divisions: Hospital and Population Health. The hospital unit operates specialty hospitals and hospital-based outpatient departments (HOPDs).
The second unit, Population Health, operates independent physician associations, or IPAs. These entities enable small physician practices to pool resources, reducing overhead costs. This unit also operates managed services organizations (MSOs) that provide similar benefits to hospitals and physicians groups.
As mentioned, this company only last month became publicly-traded. It went public through a reverse merger with Clinigence Holdings. The former Clinigence took on its name, and adopted the NUTX stock ticker symbol. Even now, it’s unclear why there was so much excitement about this deal. Excitement that resulted in a 525% move higher on April 4, the day the merger completed.
Perhaps it was due to the fact this company bills itself as a “technology-enabled” healthcare provider. It may have had little to do with its fundamentals, and more due to hype online from retail traders, though that’s not for certain. Whatever the reason, however, the wild moves it made last month aren’t what’s most important here. Instead, focus on where Nutex is going next.
No Longer a “Hot Stock”–And That’s a Good Thing
Back into the single-digits, the buzz around NUTX stock has all but disappeared. That’s of course bad news for traders who chased it during April. Yet for investors just looking at it today? This lack of hope and hype about it is a good thing.
From here, Nutex is more likely to make its next big moves based on its fundamentals. Admittedly, at present there’s limited information about Nutex. For instance, its most recent quarterly (10-Q) filing contained just the financials for the former Clinigence.
That said, the Clinigence portion of this combined entity has been growing at a fast pace. Its annual revenue went from $1.5 million in 2020, to $18.8 million in 2021. In the first quarter of 2022 alone, it generated $5.2 million in sales. We also know that the portion of this company made up of the former Nutex is profitable.
In the twelve months ending Sept. 30, 2021, it had reported an earnings before interest, taxes, depreciation, and amortization (EBITDA) of $163.9 million. This combination of a larger, more profitable enterprise with a smaller, yet faster-growing one, could result in a winning combination.
The Verdict With NUTX Stock
Nutex earns an “A” rating in my Portfolio Grader. A lot of information about it has yet to be released. It may take time for a clearer picture of the company to emerge. Nevertheless, that doesn’t mean you need to “wait and see.”
With the uncertainty, investors may have overreacted. They could have sent it to too low a price after its big moves last month. Based on what we’ve seen so far, this company has the ingredients in place to pleasantly surprise the market. That will be what sends it back to higher prices. Not another round of retail investor frenzy.
Again, this is a better play for the risk-hungry rather than the risk-averse. But if you can stomach the high risk, NUTX stock is worth considering at today’s prices.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.