Healthcare technology and services provider Syra Health (NASDAQ:SYRA) saw its market value skyrocket on Thursday. Earlier this morning, management announced that the company received selection as a subcontractor for a major federal contract valued at $75 billion. In turn, SYRA stock popped 285% before adding to those gains in the late morning session on the paradigm-shifting credibility boost.
According to the official press release, the Administration for Families and Children (ACR) and the Office of Refugee Resettlement (ORR) Medical Staffing and Support — both under the Department of Health and Human Services (HHS) — awarded the main contract to Caduceus Healthcare. In turn, Syra will provide multiple services to the Georgia-based health enterprise.
Per the statement, the contract “establishes a multiple-award vehicle for providing temporary shelter, care facilities, direct care services, medical care, case management, education, and transportation in support of HHS’s Influx Care Facilities.”
Naturally, Syra expressed satisfaction with the subcontractor award with an aim for further expansion. Syra Health CEO Dr. Deepika Vuppalanchi said the following:
“We are thrilled about the rapid success of our federal government solutions through this partnership that has awarded us our first federal-based contract. Our ability to service local, state, and now federal agency agreements, provides us with broadened capabilities and experience that will serve us well as we continue to bid on additional federal contracts.”
SYRA stock is a new public investment, with its initial public offering (IPO) occurring in late September last year.
Forged Credibility Drove Up SYRA Stock
Despite not spending much time in the business domain — having been founded in 2020 — Syra has hit the ground running. Per the press release, Syra has “served as a trusted partner to state and local governments offering specialized services catered specifically to the diverse needs of government healthcare.” Notably, the company announced the launch of its federal government solutions business unit last December.
Therefore, the transition between serving state and local government services to a federal subcontract demonstrates significant trust and credibility within the broader healthcare ecosystem. And it appears that at least some of the sentiment tied to SYRA stock may have stemmed from short covering activities.
Despite Syra being a young enterprise, it has already attracted some bearish speculation. According to Fintel, the short interest as a percentage of float is 5.73% while its short interest ratio stands at 8.42 days to cover. While neither statistic is remarkable from a short-squeeze candidacy perspective, the company is not well-known.
Even so, Fintel’s proprietary Short Squeeze Score rates SYRA stock as 88.73 out of 100. Based on its formulation, the higher the number, the greater the risk of a short squeeze materializing relative to peers.
Why It Matters
At the moment, no Wall Street analyst covers SYRA stock, likely due to its still-diminutive profile. Even with Thursday’s skyrocketing, the company’s market capitalization sits under $100 million at time of writing. In 2022, the company posted revenue of $5.6 million on a net loss of $2.12 million.
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On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.